<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 8 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 7 X
(Check appropriate box or boxes.)
The Staar Investment Trust
(Exact Name of Registrant as Specified in Charter)
604 McKnight Park Drive, Pittsburgh, PA 15237
(Address of Principal Executive Offices) Zip Code)
Registrant's Telephone Number(including Area Code) (412) 367-9076
J. Andre Weisbrod, 604 McKnight Park Drive, Pittsburgh, PA, 15237
(Name and Address of Agent for Services)
Copies to Alan Z. Lefkowitz, Esquire, Kabala & Geeseman, 200
First Avenue, Pittsburgh, PA 15222
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
on ______________ pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)
on ________________ pursuant to paragraph (a) of Rule 485
As soon as possible after the effective date of the Registration
under the Securities Act of 1933
<PAGE> 2
THE STAAR INVESTMENT TRUST
PROSPECTUS
May 1, 2000
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Contents
Information specific to each fund you should know before investing
Intermediate Bond Fund (IBF) 1
Long Term Bond Fund (LTBF) 5
Larger Company Stock Fund (LCSF) 9
Smaller Company Stock Fund (SCSF) 13
International Fund (INTF) 17
AltCat Fund (ACF) 21
Information common to all of the funds
Management 25
Buying Shares 25
Minimum Investment 26
Exchanging Shares 26
Selling Shares 26
Investor Services 27
Policies 27
Where To Learn More About the Funds Back Cover
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Page 1
RISK/RETURN SUMMARY
Intermediate Bond Fund (IBF)
A High Grade General Bond Fund
GOAL: Income with a concern for safety for principal.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests, under normal conditions, in a mix of U.S. Government,
Government Agency and Corporate debt instruments. At least 65% of its assets
must be invested in debt instruments with a dollar-weighted average maturity of
between three (3) years and ten (10) years. At least 40% of its assets must be
invested in securities issued, guaranteed or otherwise backed by the U.S.
government or government agencies and at time of purchase instruments will be
rated BBB or higher (investment grade).
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse conditions
exist. Under such circumstances, the Fund may be unable to pursue its investment
goal to the extent it does not invest in bonds as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. The value of bonds
is directly affected by changes in interest rates. When interest rates go down,
the value of bonds goes up, and when interest rates rise, the value of bonds
goes down. Share values may decrease if one or more holdings are downgraded or
default on interest payments. Income dividends can decrease if interest rates go
down. The death or disability of the Fund's manager, Andre Weisbrod, could cause
an adverse effect on the Fund's operations.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund
results may vary. It shows changes in the annual total returns of the Fund on a
calendar year basis. While the Fund has less than two full years of operations,
the Table information gives some indication of the risks of an investment in the
Fund by comparing the Fund's performance with a broad measure of market
performance. Past performance is not an indication of future results.
1999 -0.1 %
1998 7.41%
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 3.80% (quarter ending 9/30/98)
Lowest: -0.46% (quarter ending 6/30/99)
Average Annual Total Returns
For the periods ended December 31, 1999
1 Year Life*
------ -----
STAAR Intermediate Bond Fund (IBF) -0.1% 5.0%
Lehman Bros. Intermediate Govt/Corp Bond Index(1) 0.1% 5.8%
Morningstar Interm-Term Bd. Fds. Category Avg.(2) -0.2% 5.1%
*Since the Fund's public inception on 5/28/97.
(1) The Lehman Bros. Intermediate Government/Corporate Index is a broad bond
market index including both corporate investment grade and government (Treasury
and gov. agency)indexes including bonds with maturities up to 10 years. The
published returns are total returns including reinvestment of dividends. The
index is unmanaged and does not have expenses. For purposes of this prospectus,
this is the primary comparison index.
(2) The Morningstar Intermediate-Term Bond Category is an average of the total
returns of all bond funds tracked and categorized as such by Morningstar.
<PAGE> 4
Page 2
FEES AND EXPENSES:
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. They are based on the annual period ending 12/31/99.
Annual Operating Expenses (deducted from fund assets)
Management Fees (1) 0.63%
12b-1 Fees (for distribution and service) (2) 0.25%
Other Expenses (3) 0.09%
Total Annual Fund Operating Expenses 0.72%
(1) Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services. These services are included in the Advisory Agreement.
(2) These are maximum fees. The Fund adopted a distribution plan under Rule
12b-1 that permits it to pay marketing and other fees associated with the sale
and distribution of shares. These fees may not exceed .25% annually of average
net assets. The plan was presented to shareholders via mail on August 26, 1998
and voted on and approved by them on September 3, 1998. Sales of shares subject
to 12b-1 fees in 1999 were 0.017%. Due to these distribution expenses, long-term
shareholders may pay more than the economic equivalent of the maximum front-end
sales charge permitted by the National Association of Securities Dealers, Inc.
(3) Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required by
states for the privilege of selling shares in those states.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$72 $227 $398 $906
INVESTMENT STRATEGIES AND RELATED RISKS
The Intermediate Bond Fund's objective is to produce income with a concern
for safety for principal.
The Fund invests, under normal conditions, in a mix of U.S. Government,
Government Agency and Corporate debt instruments. These may include U.S.
Treasury Notes or Bonds and debt instruments issued by agencies such as the
Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm
Credit Bank, Student Loan Marketing Association and the Tennessee Valley
Authority. Debt instruments issued by companies (corporate bonds) may include
Senior and Junior bonds and debentures. Senior issues are secured obligations,
which are backed by a legal claim on specific property of the issuer. Junior
bonds and debentures are not secured by any collateral.
The Fund's strategy includes a limitation to investment grade debt
instruments (bonds). At the time of purchase, instruments will be rated AAA, AA,
A or BBB by Standard & Poors Corporation or Moody's Investor's Services. These
top four categories are considered to be "investment grade". If a holding's
rating falls below BBB, the manager will consider the size of the holding and
the circumstances causing the lower rating before selling. The manager may hold
a lower-rated security if there is reasonable cause to believe that holding it
will be advantageous to the shareholders.
At least 40% of its assets must be invested in securities issued by the
U.S. government or government agencies.
This emphasis on quality will tend to produce a lower dividend yield than
funds that invest more in lower-rated bonds. However, it will also provide
greater safety of principal.
Bonds will normally have a maturity of between two (2) and ten (10) years
when purchased. The average weighted maturity of the bonds held by the fund is
intended to be no less than three (3) and no more than seven (7) years.
The investment strategy includes intent to hold most bonds to maturity and
minimize trading unless market conditions or liquidity requirements make such
transactions advisable. This is to keep a stable portfolio base and lower
transaction costs.
In deciding to buy, hold or sell a particular bond, the manager considers a
number of factors. First, the manager considers the general trend of interest
rates to determine whether a longer or shorter maturity is more
<PAGE> 5
Page 3
desirable. Second, the manager compares differences in yield against quality
ratings to determine whether a particular issue is more or less attractive than
an alternative. Third, the manager will consider any call provisions. Fourth,
the manager may consider the bond's price in relation to its maturity or call
price. Fifth, the manager will consider any income tax effects of the
transaction. Sixth, the manager will consider any changes in ratings or the
financial condition of the issuers of bonds held in the portfolio.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money.
Interest Rate Changes -- The value of bonds is directly affected by changes in
interest rates. When interest rates go down, the value of bonds goes up, and
when interest rates rise, the value of bonds goes down. Generally, bonds with
shorter maturities are affected less by interest rate changes than those with
longer maturities.
Default Risk -- If the issuer of a bond finds itself in financial difficulties,
it could delay payment on the interest it owes to investors. If an issuer
entered bankruptcy, interest payments would likely stop all together and the
bond holder would have to wait until the bankruptcy proceedings were concluded
to find out how much (if any) of the amount invested would be returned to the
investor.
Credit Rating Changes -- Independent organizations rate the creditworthiness of
bond issuers. A high rating means the issuer is considered to be sound
financially and presents a low risk of default. If an issuer's rating is
lowered, this will tend to have a negative impact on a bond's price.
Income is affected when Interest Rates Change -- The dividend income per share
could decrease when interest rates fall.
Death or Disability of the Manager -- Death or disability could adversely affect
the day-to-day operations of the Fund.
<PAGE> 6
Page 4
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
<CAPTION>
Selected Per-Share Data
Year End December 31
1999 1998 1997*
<S> <C> <C> <C>
------ ------ ------
Net Asset Value Beg. of Period $10.45 $10.22 $ 9.97
------ ------ ------
Net Investment Income 0.54 0.57 0.33
Net realized and unrealized gains on securities -0.49 0.19 0.21
------ ------ ------
Total income from investment operations 0.05 0.76 0.54
------ ------ ------
Dividends from net Investment Income -0.48 -0.51 -0.28
Distributions From Capital Gains 0.00 -0.02 -0.01
------ ------ ------
Total Distributions -0.48 -0.53 -0.29
------ ------ ------
Net Asset Value, end of year $ 9.96 $10.45 $10.22
Total Return (%) -0.05% 7.4% 5.4%*
====== ====== ======
Ratios/Supplemental Data
Net Assets at End of Year (in $1000's) $ 1575 $ 1154 $ 622
Ratio of Expenses
to Average Net Assets (%) ** 0.72% 0.58% 0.58%
Ratio of Net Investment Income
to Average Net Assets (%) 5.31% 5.48% 3.26%
Portfolio Turnover Rate 11.85% 22.54% 6.78%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.01 per share in 1998.
** Such ratios are after effect of advisory fees waived of .13% in 1998 and .13%
in 1997.
<PAGE> 7
Page 5
RISK/RETURN SUMMARY
Long Term Bond Fund (LTBF)
A High Grade General Bond Fund
GOAL: Income with a concern for safety of principal.
PRINCIPAL INVESTMENT STRATEGIES
The Fund invests, under normal conditions, in a mix of U.S. Government,
Government Agency and Corporate debt instruments. At least 65% of its assets
must be invested in debt instruments with a dollar-weighted average maturity of
over ten (10) years. At least 40% of its assets must be invested in securities
issued, guaranteed or otherwise backed by the U.S. government or government
agencies and at time of purchase instruments will be rated BBB or higher
(investment grade).
TEMPORARY INVESTMENTS:
The manager may take a temporary position when it believes the market or economy
are experiencing excessive volatility or otherwise adverse conditions exist.
Under such circumstances, the Fund may be unable to pursue its investment goal
to the extent it does not invest in bonds as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. The value of bonds
is directly affected by changes in interest rates. When interest rates go down,
the value of bonds goes up, and when interest rates rise, the value of bonds
goes down. Share values may decrease if one or more holdings are downgraded or
default on interest payments. Longer-term bonds generally have higher volatility
than shorter-term bonds. Income dividends can decrease if interest rates go
down. The death or disability of the Fund's manager, Andre Weisbrod, could cause
an adverse effect on the Fund's operations.
<PAGE> 8
Page 7
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a calendar
year basis. While the Fund has less than two full years of operations, the Table
information gives some indication of the risks of an investment in the Fund by
comparing the Fund's performance with a broad measure of market performance.
Past performance is not an indication of future results.
1999 -4.8%
1998 8.6%
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 4.86% (quarter ending 09/30/98)
Lowest: -2.50% (quarter ending 12/31/99)
Average Annual Total Returns
For the periods ended December 31, 1999
1 Year Life*
STAAR Long Term Bond Fund (LTBF) -4.8% 5.7%
Lehman Bros. Long Term Gov/Corp Index1 -7.6% 5.0%
Morningstar Long Term Bd. Fds. Category Avg.2 -2.8% 6.7%
*Since the Fund's public inception on 5/28/97.
1 The Lehman Bros. Long Term Government/Corporate Bond Index is a broad
bond-based market index, which includes both the LB Government and the LB
Corporate Bond Indexes. Both include bonds having maturities of 10 years or
longer. Published returns are total returns including reinvested dividends. The
indexes are unmanaged and do not have expenses. For purposes of this prospectus,
this is the primary comparison index.
2 The Morningstar Long-Term Bond Category is an average of the total returns of
all bond funds tracked and categorized as such by Morningstar.
<PAGE> 9
Page 6
FEES AND EXPENSES:
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund. They are based on the annual period ending 12/31/99.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.72%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 0.81%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services. These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under Rule 12b-1
that permits it to pay marketing and other fees associated with the sale and
distribution of shares. These fees may not exceed .25% annually of average net
assets. The plan was presented to shareholders via mail on August 26, 1998 and
voted on and approved by them on September 3, 1998. Sales of shares subject to
12b-1 fees in 1999 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required by
states for the privilege of selling shares in those states.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$ 81 $ 255 $ 448 $ 1,019
INVESTMENT STRATEGIES AND RELATED RISKS
The Long Term Bond Fund's main objective is to produce income with a
concern for safety for principal.
The Fund invests, under normal conditions, in a mix of U.S. Government,
Government Agency and Corporate debt instruments. These may include U.S.
Treasury Notes or Bonds and debt instruments issued by agencies such as the
Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm
Credit Bank, Student Loan Marketing Association and the Tennessee Valley
Authority. Debt instruments issued by companies (corporate bonds) may include
Senior and Junior bonds and debentures. Senior issues are secured obligations,
which are backed by a legal claim on specific property of the issuer. Junior
bonds and debentures are not secured by any collateral.
The Fund's strategy includes a limitation to higher quality debt
instruments (bonds). At the time of purchase, instruments will be rated AAA, AA,
A or BBB by Standard & Poors Corporation or Moody's Investor's Services. These
top four categories are considered to be "investment grade". If a holding's
rating falls below BBB, the manager will consider the size of the holding and
the circumstances causing the lower rating before selling. The manager may hold
a lower-rated security if there is reasonable cause to believe that holding it
will be advantageous to the shareholders.
At least 40% of its assets must be invested in securities issued by the
U.S. government or government agencies. This emphasis on quality will tend to
produce a lower dividend yield than funds that invest more in lower-rated bonds.
However, it will also provide greater safety of principal.
Bonds will normally have a maturity of over ten (10) years when purchased.
The average weighted maturity of the bonds held by the fund is intended to be no
less than ten (10) and no more than twenty (20) years.
The investment strategy includes intent to hold most bonds to maturity and
minimize trading unless average maturity considerations, changes in credit
quality, market conditions or liquidity requirements make such transactions
advisable. This is to keep a stable portfolio base and lower transaction costs.
The Fund may increase or decrease its cash position depending on risk management
and liquidity considerations. While the Fund is not prohibited from using
derivatives, its strategy assumes little or no use of derivatives.
In deciding to buy, hold or sell a particular bond, the manager considers a
number of factors. First, the manager considers the general trend of interest
rates to determine whether a longer or shorter maturity is more desirable.
Second, the manager compares differences in yield against quality ratings to
determine whether a particular issue is more or less attractive than an
alternative. Third, the manager will consider any call provisions. Fourth, the
manager may consider the bond's price in relation to its maturity or call price.
Fifth, the manager will consider any income tax effects of the
<PAGE> 10
Page 7
transaction. Sixth, the manager will consider any changes in ratings or the
financial condition of the issuers of bonds held in the portfolio.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should consider the
following risks before investing:
Interest Rate Changes -- The value of bonds is directly affected by changes in
interest rates. When interest rates go down, the value of bonds goes up, and
when interest rates rise, the value of bonds goes down. Generally, bonds with
shorter maturities are affected less by interest rate changes than those with
longer maturities; therefore, the longer the maturity, the greater the change in
value when interest rates go up or down.
Default Risk -- If the issuer of a bond finds itself in financial difficulties,
it could delay payment on the interest it owes to investors. If an issuer
entered bankruptcy, interest payments would likely stop all together and the
bond holder would have to wait until the bankruptcy proceedings were concluded
to find out how much (if any) of the amount invested would be returned to the
investor.
Credit Rating Changes -- Independent organizations rate the creditworthiness of
bond issuers. A high rating means the issuer is considered to be sound
financially and presents a low risk of default. If an issuer's rating is
lowered, this will tend to have a negative impact on a bond's price.
Income is affected when Interest Rates Change -- The dividend income per share
could decrease when interest rates fall.
Death or Disability of the Manager -- Death or disability could adversely affect
the day-to-day operations of the Fund.
<PAGE> 11
Page 8
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
<CAPTION>
Selected Per-Share Data
Year End December 31
1999 1998 1997*
<S> <C> <C> <C>
------ ------ ------
Net Asset Value beg. of period $11.16 $10.81 $10.07
------ ------ ------
Net investment income 0.60 0.63 0.37
Net realized and unrealized gains on securities -1.07 0.30 0.78
------ ------ ------
Total income from investment operations -0.47 0.93 1.15
------ ------ ------
Dividends from net investment income -0.56 -0.58 -0.41
Distributions From capital gains -0.05 0.00 0.00
------ ------ ------
Total Distributions -0.61 -0.58 -0.41
------ ------ ------
Net Asset Value, end of period $10.09 $11.16 $10.81
Total Return (%) -4.8% 8.6% 11.4%*
====== ====== ======
Ratios/Supplemental Data
Net Assets at end of period (in $1000's) $ 807 $ 598 $ 339
Ratio of Expenses to Average Net Assets (%) ** 0.81% 0.69% 0.70%
Ratio of Net Investment Income to Average Net Assets (%) 5.28% 5.70% 3.54%
Portfolio Turnover Rate 4.10% 6.40% 0.00%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.01 per share were waived in 1998.
** Such ratios are after effect of advisory fees waived of .12% in 1998 and .12%
in 1997.
<PAGE> 12
Page 9
RISK/RETURN SUMMARY
Larger Company Stock Fund (LCSF)
A fund of funds in which the underlying investments are primarily common
stocks of large companies and larger mid-cap companies.
GOAL: Growth with Some Income
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests primarily in other mutual funds that invest in stocks of
large and larger mid-sized companies. Open-end and closed-end mutual funds as
well as unit trusts may be owned. Individual stocks may also be owned by the
Fund. Under normal conditions, at least 65% of the Fund's assets (including
assets owned by underlying mutual funds) must be invested in common stocks of
companies having market capitalization of over $3 billion.
In terms of market composition, the majority of holdings are intended to
represent primarily United States based large companies with market
capitalization (size) of $5 billion or more. Some holdings will include larger
mid-cap stocks having market capitalization between $3 billion and $5 billion.
While some mutual funds owned by the LCSF may own some smaller companies, they
are intended to be an incidental portion of the Fund's holdings, i.e. less than
5%.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors. In terms of investment
styles, the fund will generally employ a mix of growth and value management
styles, sometimes called a "blend" style. Depending on economic and market
conditions and trends, the Fund's manager may weight the styles toward either
growth or value.
Most mutual funds and stocks owned are expected to produce some dividend
income.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse conditions
exist. Under such circumstances, the Fund may be unable to pursue its investment
goal to the extent it does not invest in stocks as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of the
Fund will likely decrease if the general stock market declines. Market values
can fall for numerous reasons, including changing economic and political
conditions or simply because more investors have decided to sell than buy
stocks. Individual stocks or sectors can go down in value even when the general
market is up. The death or disability of the Fund's manager could cause an
adverse effect on the Fund's operations.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a calendar
year basis. While the Fund has less than two full years of operations, the Table
information gives some indication of the risks of an investment in the Fund by
comparing the Fund's performance with a broad measure of market performance.
Past performance is not an indication of future results.
1999 15.9%
1998 12.9%
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 17.8% (quarter ending 12/31/98)
Lowest: -12.57% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR Larger Company Stock Fund (LCSF) 15.9% 16.4%
Dow Jones Industrials Average 1 27.2% 20.6%
S&P 500 Index 2 21.0% 25.3%
Morningstar Growth & Inc Fds Category Avg 3 13.7% 17.7%
<PAGE> 13
Page 10
*Since the Fund's public inception on 5/28/97.
1 The Dow Jones Industrial Average is an average of the prices of 30 stocks
representing different sectors, which is computed by summing the prices and then
dividing the total by an adjusted value to account for the effects of stock
splits. The index is unmanaged and has no expenses.
2 The S&P 500 is a broad market index of the 500 largest companies in various
market sectors. It is a market-capitalization weighted average which emphasizes
the largest companies. Published returns are total returns including reinvested
dividends. The index is unmanaged and has no expenses. For purposes of this
prospectus, this is the primary comparison index.
3 The Morningstar Growth & Income Funds Category is an average of the total
returns of all funds tracked and categorized as such by Morningstar.
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/99.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 4 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services. These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under Rule
12b-1 that permits it to pay marketing and other fees associated with the sale
and distribution of shares. These fees may not exceed .25% annually of average
net assets. The plan was presented to shareholders via mail on August 26, 1998
and voted on and approved by them on September 3, 1998. Sales of shares subject
to 12b-1 fees in 1999 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required by
states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other mutual
funds owned by the LCSF are not shown in the above table. The expense ratios of
the other mutual funds owned by the LCSF in 1999 ranged from .61% to 1.5% with a
median at .89%. These include 12b-1 fees paid by some of the funds owned by the
LCSF.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The Larger Company Stock Fund's objective is to produce long term growth of
capital with some income by investing primarily in common stocks of U.S. based
large and mid-sized companies, including other mutual funds that invest
primarily in such stocks. Larger companies are defined as those having a market
capitalization (size) of $3 billion or more.
The majority of holdings are intended to represent primarily United States
based large companies with market capitalization (size) of $5 billion or more.
Some holdings will include larger mid-cap stocks having market capitalization
between $3 billion and $5 billion. While some mutual funds owned by the LCSF may
own some smaller companies, they are intended to be an incidental portion of the
Fund's holdings.
The Fund invests, under normal conditions, a majority of its assets in a
mix of other mutual funds. The mutual funds are chosen to provide a mix of
investment styles and portfolios that represent the broad stock market as
opposed to any one index. From time to time open-end, closed-end as well as unit
trusts may be owned. Individual stocks may also be owned by the Fund as long as
they represent a minority of the Fund's net asset value.
In terms of investment styles, the fund will generally employ a mix of
growth and value managers, sometimes called a "blend" style. Depending on market
conditions and trends, the Fund's manager may weight the styles toward either
growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
<PAGE> 14
Page 11
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain kinds
of risks such as those associated with too much exposure to one manager,
management style or industry sector or the risks inherent in having too few
holdings.
In deciding to buy, hold or sell a particular mutual fund, the manager
considers a number of factors. The manager examines general economic and market
trends and their possible effect on the fund. The mutual fund's objectives must
correlate with the general objective of the Fund and it's holdings should not
significantly overlap the holdings of other mutual funds owned by the Fund. The
fund and manager's history is considered, as are expense ratios, current
holdings and management style. If a mutual fund changes its make-up so that it
no longer correlates with the Fund's objective, it may be sold. Similarly, if a
mutual fund fails to perform up to expectations, it may be sold. The manager
will first consider whether portfolio changes or lower performance is likely to
be temporary. If so, the position may be retained. Because of tax and other
considerations, the changing of mutual fund positions may be done in stages over
a period of weeks or months.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern. The Fund's manager or the managers of other
mutual funds owned by the Fund may employ derivatives, though such instruments
will normally represent a very small portion of the Fund's portfolio, i.e. less
than 5%. Derivatives are securities that derive their value based on the value
of another asset. Examples include, but are not limited to options and futures
contracts.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should consider the
following risks before investing:
Market Risk -- While stocks have historically performed better than other asset
classes over long time periods, they also have experienced more extreme ups and
downs (volatility). Regardless of the condition of any single company, the value
of its stock may go down when the general market goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value even in
an 'up" market.
Changing economic and political conditions -- The stock market and/or individual
stocks can be adversely affected by changes in the economy or politics.
Recessions, downturns in a particular industry or changes in tax or regulatory
laws can cause share values of the Fund to decrease.
Death or Disability of the Manager -- Death or disability could adversely affect
the day-to-day operations of the Fund.
<PAGE> 15
Page 12
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
<CAPTION>
Selected Per-Share Data
Year End December 31, 1999
1999 1998 1997*
<S> <C> <C> <C>
------ ------ ------
Net asset value beg. of period $12.99 $12.16 $11.66
------ ------ ------
Net investment income -0.02 0.03 0.15
Net realized and unrealized gains on securities 2.06 1.56 1.39
------ ------ ------
Total income from investment operations 2.04 1.59 1.54
------ ------ ------
Dividends from net investment income 0.00 -0.04 -0.13
Distributions From capital gains 1.11 -0.72 -0.91
------ ------ ------
Total Distributions 1.11 -0.76 -1.04
------ ------ ------
Net asset value, end of period $13.98 $12.99 $12.16
Total Return (%) 15.9% 12.9% 13.2%*
====== ====== ======
Ratios/Supplemental Data
Net assets at end of period (in $1000's) $ 2430 $ 1852 $ 1276
Ratio of expenses to average net assets (%) ** 0.99% 1.00% 0.25%
Ratio of net investment income to average net assets (%) -0.13% 0.23% 1.81%
Portfolio turnover rate 6.52% 30.21% 7.84%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.05 per share were waived in 1997.
** Such ratios are after effect of advisory fees waived of 0% in 1998 and .25%
in 1997.
<PAGE> 16
Page 13
RISK/RETURN SUMMARY
Smaller Company Stock Fund (SCSF)
A fund of funds in which the underlying investments are primarily common
stocks of small, micro-cap and smaller mid-cap companies.
GOAL: Long Term Growth
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests primarily in other mutual funds in that invest in stocks
of small-cap, micro-cap and smaller mid-sized companies. Open-end and closed-end
mutual funds as well as unit trusts may be owned. Individual stocks may also be
owned by the Fund. Under normal conditions, at least 65% of the Fund's assets
(including assets owned by underlying mutual funds) must be invested in common
stocks of companies having market capitalization of under $3 billion.
In terms of market composition, the majority of holdings are intended to
represent primarily United States based small companies with market
capitalization (size) of under $1 billion. Some holdings will include smaller
mid-cap stocks having market capitalization between $1 billion and $3 billion.
The Fund may also hold Micro-cap stocks having market capitalization of under
$100 million. While some mutual funds owned by the SCSF may own some larger
companies, they are intended to be an incidental portion of the Fund's holdings,
i.e. less than 5%.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors. In terms of investment
styles, the fund will generally employ a mix of growth and value management
styles, sometimes called a "blend" style. Depending on economic and market
conditions and trends, the Fund's manager may weight the styles toward either
growth or value.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or economy
are experiencing excessive volatility or otherwise adverse conditions exist.
Under such circumstances, the Fund may be unable to pursue its investment goal
to the extent it does not invest in stocks as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of the Fund
will likely decrease if the general stock market declines. Market values can
fall for numerous reasons, including changing economic and political conditions
or simply because more investors have decided to sell than buy stocks.
Individual stocks or sectors can go down in value even when the general market
is up. The death or disability of the Fund's manager could cause an adverse
effect on the Fund's operations.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a calendar
year basis. While the Fund has less than two full years of operations, the Table
information gives some indication of the risks of an investment in the Fund by
comparing the Fund's performance with a broad measure of market performance.
Past performance is not an indication of future results.
1999 30.4%
1998 2.9%
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 26.53% (quarter ending 12/31/99)
Lowest: -19.34% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR Smaller Company Stock Fund (SCSF) 30.4% 17.7%
Russell 2000 Index(1) 21.3% 13.3%
Morningstar Small Co. Fds. Objective Avg.(2) 36.0% 18.9%
<PAGE> 17
Page 14
*Since the Fund's public inception on 5/28/97.
1 The Russell 200 Index is a broad index which consists of the 2000 smallest
companies in the Russell 3000 Index, representing approximately 7% of the
Russell 3000 total market capitalization. Published returns are total returns
including reinvested dividends. The index is unmanaged and has no expenses. For
purposes of this prospectus, this is the primary comparison index.
2 The Morningstar Small Company Funds Objective Average is an average of the
total returns of all funds tracked by Morningstar having that objective.
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/99.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services. These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under Rule
12b-1 that permits it to pay marketing and other fees associated with the sale
and distribution of shares. These fees may not exceed .25% annually of average
net assets. The plan was presented to shareholders via mail on August 26, 1998
and voted on and approved by them on September 3, 1998. Sales of shares subject
to 12b-1 fees in 1998 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required by
states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other
mutual funds owned by the SCSF are not shown in the above table. The expense
ratios of the other mutual funds owned by the SCSF in 1999 ranged from .84% to
1.70% with a median at 1.06%. These include 12b-1 fees paid by some of the funds
owned by the SCSF.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The Smaller Company Stock Fund's objective is to produce long term growth
of capital by investing primarily in common stocks of U.S. based small and
mid-sized companies, including other mutual funds that invest primarily in such
stocks. Smaller companies are defined as those having a market capitalization
(size) of less than $3 billion. "MicroCap" stocks with market capitalization of
under $100 million may also be owned.
The Fund invests, under normal conditions, a majority of its assets in a
mix of other mutual funds. The mutual funds are chosen to provide a broadly
diversified mix of investment styles and portfolios. From time to time open-end,
closed-end as well as unit trusts may be owned. Individual stocks may also be
owned by the Fund as long as they represent a minority of the Fund's net asset
value. Under normal conditions the Fund will invest at least 65% of its assets
in these types of investments.
In terms of investment styles, the fund will generally employ a mix of
growth and value management, sometimes called a "blend" style. Depending on
market conditions and trends, the Fund's manager may weight the styles toward
either growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain kinds
of risks such as those associated with too much exposure to one manager,
management style or industry sector or the risks inherent in having too few
holdings.
In deciding to buy, hold or sell a particular mutual fund, the manager
considers a number of factors. The manager examines general economic and market
trends and their possible effect on the fund. The mutual fund's
<PAGE> 18
Page 15
objectives must correlate with the general objective of the Fund and it's
holdings should not significantly overlap the holdings of other mutual funds
owned by the Fund. The fund and manager's history is considered, as are expense
ratios, current holdings and management style. If a mutual fund changes its
make-up so that it no longer correlates with the Fund's objective, it may be
sold. Similarly, if a mutual fund fails to perform up to expectations, it may be
sold. The manager will first consider whether portfolio changes or lower
performance is likely to be temporary. If so, the position may be retained.
Because of tax and other considerations, the changing of mutual fund positions
may be done in stages over a period of weeks or months.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern. The Fund's manager or the managers of other
mutual funds owned by the Fund may employ derivatives, though such instruments
will normally represent a very small portion of the Fund's portfolio, i.e. less
than 5%. Derivatives are securities that derive their value based on the value
of another asset. Examples include, but are not limited to options and futures
contracts.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should consider the
following risks before investing:
Market Risk -- While stocks have historically performed better than other asset
classes over long time periods, they also have experienced more extreme ups and
downs (volatility). Regardless of the condition of any single company, the value
of its stock may go down when the general market goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value even in
an "up" market.
Smaller Companies -- Historically, smaller companies have experienced more
extreme ups and downs (volatility) than larger company stocks. Smaller companies
may have less working capital, less liquidity and greater sensitivity to
competition and overall economic and market conditions. While smaller companies
may offer greater opportunities for growth, they also should be considered more
risky.
Changing economic and political conditions -- The stock market and/or individual
stocks can be adversely affected by changes in the economy or politics.
Recessions, downturns in a particular industry or changes in tax or regulatory
laws can cause share values of the Fund to decrease.
Death or Disability of the Manager -- Death or disability could adversely affect
the day-to-day operations of the Fund.
<PAGE> 19
Page 16
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
<CAPTION>
Selected Per-Share Data
Year End December 31
1999 1998 1997*
<S> <C> <C> <C>
------ ------ ------
Net asset value beg. of period $11.45 $11.45 $10.32
------ ------ ------
Net investment income -0.09 -0.05 -0.02
Net realized and unrealized gains on securities 3.31 0.38 1.47
------ ------ ------
Total income from investment operations 3.22 0.33 1.44
------ ------ ------
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains -1.11 -0.33 -0.32
------ ------ ------
Total Distributions -1.11 -0.33 -0.32
------ ------ ------
Net asset value, end of period $13.86 $11.45 $11.45
Total return (%) 30.4% 2.9% 13.9%*
====== ====== ======
Ratios/Supplemental Data
Net assets at end of period (in $1000's) $ 2279 $ 1613 $ 1177
Ratio of expenses to average net assets (%) 0.99% 0.99% 1.02%
Ratio of net investment income to average net assets (%) -0.72% -0.47% -0.18%
Portfolio turnover rate 33.53% 6.45% 4.04%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
<PAGE> 20
Page 17
RISK/RETURN SUMMARY
International Fund (INTF)
A fund of funds investing primarily in stocks of companies in countries
outside the United States, including emerging markets.
GOAL: Long term growth primarily through investments in international stocks.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund invests primarily in other mutual funds in that invest in stocks
of foreign countries, including emerging markets.
A strategic goal is to maintain a broad mix of countries and industries.
Depending on market conditions and trends, the Fund's manager may weight the
overall portfolio mix to higher or lower exposure to geographical regions and/or
industry sectors. Under normal conditions, at least 65% of the Fund's assets
(including assets owned by underlying mutual funds) must be invested in common
stocks.
In terms of investment styles, the fund will generally employ a mix of
growth and value management styles, sometimes called a "blend" style. Depending
on economic and market conditions and trends, the Fund's manager may weight the
styles toward either growth or value.
At least 65% of the Fund's assets will be in foreign stocks or other mutual
funds that hold predominantly foreign stock. Occasionally, a global fund having
some U.S. investments may be included. The majority of the Fund's investments
will be in the stocks of developed nations outside the United States.
Emerging markets are considered an increasingly important component of the
global economy. Therefore, the Fund's strategy includes ongoing investments in
developing countries. The Fund may not invest more than 35% of the Fund's assets
in emerging markets.
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or economy
are experiencing excessive volatility or otherwise adverse conditions exist.
Under such circumstances, the Fund may be unable to pursue its investment goal
to the extent it does not invest in international stocks as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of the
Fund will likely decrease if the general international stock market declines or
if the markets in specific countries decline. Market values can fall for
numerous reasons, including changing economic and political conditions or simply
because more investors have decided to sell than buy specific securities,
sectors or regions. Individual stocks or sectors can go down in value even when
the general market is up. International markets present additional risks,
including political and currency exchange risks. These risks can be greater in
emerging markets. The death or disability of the Fund's manager, Andre Weisbrod,
could cause an adverse effect on the Fund's operations.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a calendar
year basis. While the Fund has less than two full years of operations, the Table
information gives some indication of the risks of an investment in the Fund by
comparing the Fund's performance with a broad measure of market performance.
Past performance is not an indication of future results.
1999 38.7%
1998 3.3%
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 21.33% (quarter ending 12/31/99)
Lowest: -16.70% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR International Fund (INTF) 38.7% 12.3%
MSCI EAFE Index1 27.0% 15.4%
Morningstar Foreign Stock Fds.
Category Avg.2 44.3% 17.9%
Morningstar Diversified
Emerging Mkts. Fds. Category Avg.3 71.8% 2.9%
<PAGE> 21
Page 18
1 The MSCI EAFE index is a broad international index widely accepted as a
benchmark for international stock performance. It consists of an aggregate of 21
individual country indexes, which represent the major world, markets. Published
returns are total returns including reinvested dividends. The index is unmanaged
and has no expenses. For purposes of this prospectus, this is the primary
comparison index.
2 The Morningstar Foreign Stock Funds Category Average is an average of the
total returns of all funds tracked and categorized as such by Morningstar.
3 The Morningstar Diversified Emerging Markets Funds Category Average is an
average of the total returns of all funds tracked and categorized as such by
Morningstar.
*Since the Fund's public inception on 5/28/97.
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/99.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 4,5 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services. These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under Rule
12b-1 that permits it to pay marketing and other fees associated with the sale
and distribution of shares. These fees may not exceed .25% annually of average
net assets. The plan was presented to shareholders via mail on August 26, 1998
and voted on and approved by them on September 3, 1998. Sales of shares subject
to 12b-1 fees in 1999 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required by
states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other
mutual funds owned by the INTF are not shown in the above table. The expense
ratios of the other mutual funds owned by the INTF in 1999 ranged from .84% to
2.11% with a median at 1.06%. These include 12b-1 fees paid by some of the funds
owned by the SCSF.
5 Foreign taxes paid are not shown here.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The International Fund's objective is to produce long term growth of
capital by investing primarily in equity securities in markets outside the
United States, including emerging markets.
The Fund invests, under normal conditions, a majority of its assets in a
mix of other mutual funds. The mutual funds are chosen to provide a mix of
investment styles and portfolios that represent the broad international market,
including small and developing countries. From time to time open-end and closed-
end funds as well as unit trusts may be owned. Individual stocks may also be
owned by the Fund as long as they represent a minority of the Fund's net asset
value. Large, mid-sized and small companies may be owned.
In terms of investment styles, the fund will generally employ a mix of
growth and value managers, sometimes called a "blend" style. Depending on market
conditions and trends, the Fund's manager may weight the styles toward either
growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
<PAGE> 22
Page 19
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain kinds
of risks such as those associated with too much exposure to one manager,
management style, region or industry sector as well as the risks inherent in
having too few holdings.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern. The Fund's manager or the managers of other
mutual funds owned by the Fund may employ derivatives or utilize certain risk
management techniques, such as currency hedging. Derivatives are securities that
derive their value based on the value of another asset. Examples include, but
are not limited to options and futures contracts.
In deciding to buy, hold or sell a particular mutual fund, the manager
considers a number of factors. The manager examines general economic and market
trends and their possible effect on the fund. The mutual fund's objectives must
correlate with the general objective of the Fund and it's holdings should not
significantly overlap the holdings of other mutual funds owned by the Fund. The
fund and manager's history is considered, as are expense ratios, current
holdings and management style. If a mutual fund changes its make-up so that it
no longer correlates with the Fund's objective, it may be sold. Similarly, if a
mutual fund fails to perform up to expectations, it may be sold. The manager
will first consider whether portfolio changes or lower performance is likely to
be temporary. If so, the position may be retained. Because of tax and other
considerations, the changing of mutual fund positions may be done in stages over
a period of weeks or months.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should consider the
following risks before investing:
Market Risk -- While stock markets have historically performed better than other
asset classes over long time periods, they also have experienced more extreme
ups and downs (volatility). Regardless of the condition of any single company,
the value of its stock may go down when the general market goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value even in
an "up" market.
Foreign Securities -- Securities of entities located outside the U.S. involve
additional risks that can increase the potential for losses. These include
political changes and the fact that some countries may not require the same
accounting and financial practices that are standard in this country. The
fluctuation of foreign currencies against the dollar also can cause the value of
an investment to decrease in dollar terms even if it does not fall in terms of
its country's currency.
Emerging Markets -- While stock markets of smaller and developing countries
offer excellent opportunities for growth, they also increase the potential for
market volatility and investment losses due to political and economic
turbulence.
Smaller Companies -- Historically, smaller companies have experienced more
extreme ups and downs (volatility) than larger company stocks. Smaller companies
may have less working capital, less liquidity and greater sensitivity to
competition and overall economic and market conditions. While smaller companies
may offer greater opportunities for growth, they also should be considered more
risky.
Death or Disability of the Manager -- Death or disability could adversely affect
the day-to-day operations of the Fund.
<PAGE> 23
Page 20
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
<CAPTION>
Selected Per-Share Data
Year End December 31
1999 1998 1997*
<S> <C> <C> <C>
------ ------ ------
Net asset value beg. of period $10.60 $10.50 $11.73
------ ------ ------
Net investment income 0.05 0.07 0.12
Net realized and unrealized gains on securities 4.06 0.31 -0.78
------ ------ ------
Total income from investment operations 4.11 0.38 -0.66
------ ------ ------
Dividends from net investment income -0.05 -0.08 -0.10
Distributions from capital gains -0.58 -0.20 -0.47
------ ------ ------
Total distributions 0.63 -0.28 -0.57
------ ------ ------
Net Asset Value, end of Period $14.08 $10.60 $10.50
Total return (%) 38.7% 3.3% -5.64%*
====== ====== ======
Ratios/Supplemental Data
Net assets at end of period (in $1000's) $ 2179 $ 1608 $ 1126
Ratio of expenses to average net assets (%)** 0.99% 0.99% 0.70%
Ratio of net investment income to average net assets (%) 0.39% 0.65% 1.04%
Portfolio turnover rate 13.12% 2.30% 0.00%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
Advisory Fees of $.03 per share were waived in 1997.
** Does not include foreign tax paid of .18% in 1998 and .18% in 1997. Such
ratios are after effect of advisory fees waived of 0% in 1998 and .35% in 1997.
<PAGE> 24
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RISK/RETURN SUMMARY
AltCat (Alternative Categories) Fund (ACF)
A flexibly-managed, multi-asset global fund of funds investing primarily in
assets which offer opportunities for growth of capital.
GOAL: Long term growth through broadly diversified global investments.
PRINCIPAL INVESTMENT STRATEGIES:
The Fund's main strategy is to identify investment opportunities that will
participate in long-term or short-term trends. The Fund may invest in any kind
of investment security allowable under securities laws. Under normal conditions,
at least 65% of the Fund's assets will be invested in other mutual funds or
securities that may or may not fit the general asset allocation categories of
the other Funds in the Trust (IBF, LTBF, LCSF, SCSF and INTF).
TEMPORARY INVESTMENTS
The manager may take a temporary position when it believes the market or
economy are experiencing excessive volatility or otherwise adverse conditions
exist. Under such circumstances, the Fund may be unable to pursue its investment
goal to the extent it does not invest as described above.
MAIN RISKS:
It is possible to lose money by investing in this Fund. Share values of the
Fund can decrease in value if the U.S. stock markets or the markets in specific
countries decline. Market values can fall for numerous reasons, including
changing economic and political conditions, changes in currency values or simply
because more investors have decided to sell than buy certain securities or
categories of securities. Individual stocks or sectors can go down in value even
when the general market is up. The death or disability of the Fund's manager
could cause an adverse effect on the Fund's operations. In addition, some
countries are not as compliant as the U.S. regarding the Y2K computer problem,
which could add some risk to this Fund.
PERFORMANCE:
BAR CHART & TABLE
The following bar chart is provided to give you some idea of how Fund results
may vary. It shows changes in the annual total returns of the Fund on a calendar
year basis. While the Fund has less than two full years of operations, the Table
information gives some indication of the risks of an investment in the Fund by
comparing the Fund's performance with a broad measure of market performance.
Past performance is not an indication of future results.
1999 30.7%
1998 -5.75%
The Fund's highest and lowest quarterly returns during this time period were:
Highest: 14.94% (quarter ending 12/31/99)
Lowest: -12.06% (quarter ending 9/30/98)
Average Annual Total Returns
For the periods ended December 31, 1998
1 Year Life*
STAAR AltCat Fund (ACF) 30.7% 8.2%
Morningstar Multi-Asset Global Objective Avg. 1 20.2% 11.6%
*Since the Fund's public inception on 5/28/97.
1 The Morningstar Multi-Asset Global Funds Objective Average is an average of
the total returns of all funds tracked by Morningstar having that objective.
<PAGE> 25
Page 22
FEES AND EXPENSES: This table describes the fees and expenses that you may pay
if you buy and hold shares of the Fund. They are based on the annual period
ending 12/31/99.
Annual Operating Expenses (deducted from fund assets)
Management Fees 1 0.90%
12b-1 Fees (for distribution and service) 2 0.25%
Other Expenses 3 0.09%
Total Annual Fund Operating Expenses 4,5 0.99%
1 Management fees include services in addition to investment advisory
services, including shareholder, transfer agency, accounting, custodial, legal
and other services. These services are included in the Advisory Agreement.
2 These are maximum fees. The Fund adopted a distribution plan under Rule
12b-1 that permits it to pay marketing and other fees associated with the sale
and distribution of shares. These fees may not exceed .25% annually of average
net assets. The plan was presented to shareholders via mail on August 26, 1998
and voted on and approved by them on September 3, 1998. Sales of shares subject
to 12b-1 fees in 1999 were insignificant. Due to these distribution expenses,
long-term shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
3 Other expenses may include trustee compensation, federal and state filing
fees and other expenses as approved by the trustees. Filing fees are required by
states for the privilege of selling shares in those states.
4 This is a "fund of funds". The management fees and expenses of other
mutual funds owned by the ACF are not shown in the above table. The expense
ratios of the other mutual funds owned by the ACF in 1999 ranged from .36% to
2.35% with a median at 1.17%. These include 12b-1 fees paid by some of the funds
owned by the SCSF.
5 Foreign taxes paid are not shown here.
EXAMPLE OF EXPENSES: This example is provided to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds. The
example assumes you invest $10,000 for the periods shown and then sell all your
shares at the end of those periods. It also assumes that your investment has a
5% return each year, that dividends and other distributions are reinvested and
that the fund's operating expenses stay the same. Any 12b-1 fees paid by the
Fund are included.
Year 1 Year 3 Year 5 Year 10
$99 $312 $547 $1245
INVESTMENT STRATEGIES AND RELATED RISKS
The AltCat Fund's objective is to produce long term growth of capital
through broadly diversified global investment in securities that have the
potential to participate in long-term or short-term trends. The projected
increase in demand for energy by developing nations is an example of a long-term
trend.
The Fund may invest in any kind of domestic or foreign security allowable
under securities laws.
Mutual funds are owned by the ACF. They are chosen to provide a variety of
investment styles and portfolios. Open-end and closed-end funds as well as unit
trusts may be owned. Individual stocks may also be owned by the Fund. Large,
mid-sized and small companies may be owned. The Fund may also purchase bonds,
real estate investment trusts (REITs), mortgage securities preferred stocks,
convertible securities and precious metals. Investments are chosen to provide a
mix of investment styles and portfolios that represent a broad global investment
market as opposed to any one market or index.
In terms of investment styles, the fund will generally employ a mix of
growth and value managers, sometimes called a "blend" style. Depending on market
conditions and trends, the Fund's manager may weight the styles toward either
growth or value.
A broad mix of industries is also a strategic goal. Depending on market
conditions and trends, the Fund's manager may weight the overall portfolio mix
to higher or lower market capitalization and sectors.
The goal is to provide a wide diversification of holdings and management
styles and expertise. Such diversification is designed to minimize certain kinds
of risks such as those associated with too much exposure to one manager,
management style or industry sector or the risks inherent in having too few
holdings.
The Fund may increase or decrease its cash and short-term holdings
depending on the manger's evaluation of market conditions, or when anticipated
liquidity needs are a concern. Direct investments in derivatives are allowed,
but normally would represent little or none of the direct assets held by the
Fund, i.e. less than 5%. Derivatives are securities that derive their value
based on the value of another asset. Examples include, but are not limited to
options and futures contracts. Managers of other mutual funds owned by the Fund
may utilize derivatives and certain risk management techniques, such as currency
hedging.
<PAGE> 26
Page 23
In deciding to buy, hold or sell a particular security or mutual fund, the
manager considers a number of factors. The manager examines general economic and
market trends and their possible effect on the fund. A fund and its manager's
history is considered, as are expense ratios, current holdings and management
style. If a mutual fund fails to perform up to expectations, it may be sold.
Because of tax and other considerations, the changing of mutual fund positions
may be done in stages over a period of weeks or months.
As described in the Risk/Return Summary, there are risks associated with
investing in the Fund, and it is possible to lose money. You should consider the
following risks before investing:
Market Risk -- While stock markets have historically performed better than other
asset classes over long time periods, they also have experienced more extreme
ups and downs (volatility). Regardless of the condition of any single company,
the value of its stock may go down when the general market goes down.
Investment Risk -- Regardless of the direction of the overall market, an
individual company can experience financial difficulties or even bankruptcy.
Problems with individual companies can adversely affect the Fund's value even in
an "up" market.
Foreign Securities -- Securities of entities located outside the U.S. involve
additional risks that can increase the potential for losses. These include
political changes and the fact that some countries may not require the same
accounting and financial practices that are standard in this country. The
fluctuation of foreign currencies against the dollar also can cause the value of
an investment to decrease in dollar terms even if it does not fall in terms of
its country's currency. To the extent that an investment is concentrated in a
particular country or region, risk can be amplified.
Emerging Markets -- While stock markets of smaller and developing countries
offer excellent opportunities for growth, they also increase the potential for
market volatility and investment losses due to political and economic
turbulence.
Smaller Companies -- Historically, smaller companies have experienced more
extreme ups and downs (volatility) than larger company stocks. Smaller companies
may have less working capital, less liquidity and greater sensitivity to
competition and overall economic and market conditions. While smaller companies
may offer greater opportunities for growth, they also should be considered more
risky.
Debt Instruments -- To the extent that the Fund invests in any debt instruments,
such investments would entail the risks associated with those instruments,
including changes in interest rates, default risk and credit rating changes.
Death or Disability of the Manager -- Death or disability could adversely affect
the day-to-day operations of the Fund.
<PAGE> 27
Page 24
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Carson & Co., whose report, along with the Fund's financial
statements, are included in the Fund's Annual Report, which is available upon
request.
<TABLE>
<CAPTION>
Selected Per-Share Data
Year End December 31
1999 1998 1997*
------ ------ ------
<S> <C> <C> <C>
Net asset value beg. of period $9.67 $10.53 $10.68*
------ ------ ------
Net investment income 0.06 0.13 0.11
Net realized and unrealized gains on securities 2.91 -0.73 -0.16
------ ------ ------
Total income from investment operations 2.97 -0.60 -0.05
------ ------ ------
Dividends from net investment income -0.06 -0.13 -0.09
Distributions from capital gains -0.25 -0.13 -0.01
------ ------ ------
Total distributions -0.31 -0.26 -0.10
------ ------ ------
Net Asset Value, end of Period $12.35 $ 9.67 $10.53
Total return (%) 30.7% -5.8% -0.4%*
====== ====== ======
Ratios/Supplemental Data
Net assets at end of period (in $1000's) 570 $ 374 $ 307
Ratio of expenses to average net assets (%) ** 0.99% 0.99% 0.77%
Ratio of net investment income to average net assets (%) 0.52% 1.24% 1.00%
Portfolio turnover rate 4.15% 0.02% 2.74%
</TABLE>
* Data shown for 1997 is not representative of a full year's operation because
the public inception date of the six series funds was May 28, 1997.
** Does not include foreign tax paid of .05% in 1998. Such ratios are after
effect of advisory fees waived of 0% in 1998 and .11% in 1997.
<PAGE> 28
Page 25
INFORMATION COMMON TO ALL OF THE FUNDS
MANAGEMENT
STAAR Financial Advisors, Inc. (SFA), 604 McKnight Park Dr., Pittsburgh, PA
15237 is the Fund's investment advisor. Mr. J. Andre Weisbrod, President of SFA,
is the Portfolio Manager of each Fund and has been primarily responsible for all
Funds' day-to-day management since inception. Mr. Weisbrod's experience includes
management of these Funds since private inception on 4/4/96. He has been
President and CEO of SFA since 1993, providing financial planning and investment
advisory services to individual and corporate clients. He has also been a
registered securities representative since 1983. His broker-dealer affiliation
over the past five years has been with Hornor Townsend & Kent (through 7/1/98)
and Olde Economie Financial Consultants (since 7/1/98). Additional information
is provided in the Statement of Additional Information (SAI), which may be
obtained from Shareholder Services.
As provided in the Advisory Agreement, SFA also provides other services
(directly or indirectly) in addition to investment management, including
transfer agency, shareholder services, accounting and legal services.
The Funds paid the following fees to the Advisor in 1999 as a percentage of
average net assets:
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
1998 Fees .63% .72% .90% .90% .90% .90%
</TABLE>
Management's discussion of Fund Performance may be found in the Annual and
SemiAnnual Reports to Shareholders. These may be obtained from Shareholder
Services.
Fund History
The six Trust Funds were instituted as a private Pennsylvania business
trust on 2/28/96. Investment operations began on April 4, 1996. The Trust's
public operations began effective May, 28, 1997. Investment operations,
including the Funds' investment management, existed in the same way before and
after May 28, 1997. Information regarding operations prior to May 28, 1997 can
be obtained from Shareholder Services.
Fund of Funds
The Fund of Funds approach provides broader diversification of holdings as
well as managers. However, owning other mutual funds within some of its Funds
generally results in greater expenses for those Funds than if they held
individual securities only. (See footnote 4 under Fees and Expenses in the
RISK/RETURN SUMMARY of the LCSF, SCSF, INTF and ACT.) Normally, this does not
apply to the bond funds (IBF and LTBF); while they are not prohibited from doing
so, they generally do not hold other mutual funds.
SHAREHOLDER INFORMATION
HOW FUND SHARES ARE PRICED
The Net Asset Value (NAV) of a share of each Fund is calculated based on
the closing price of securities on each day that the New York Stock Exchange is
open (normally 4:00 P.M. eastern time). The NAV is determined by dividing the
total of each Fund's net assets by the total number of outstanding shares of
each Fund. The Funds' Net Asset Values will not be computed for any days on
which the market is closed, including national holidays (generally New Year's
Day, Martin Luther King Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas).
The value of mutual funds held by any of the Funds will be that value
provided by such funds according to the methods used by those funds. Because of
possible delays obtaining final pricing information regarding other mutual
funds, the calculation of the NAV of each of the Trust's Funds will generally be
completed the morning of the next business day. Therefore, should any of the
Funds be listed in newspapers, it is likely that the prices reported in the
newspapers will lag the Funds' actual prices by one day.
The Trust can take no responsibility for errors by other mutual funds in
reporting their net asset values or by third party sources used for pricing.
BUYING SHARES
By Mail
You may open an account using the written application form. Legible
photocopies of the application form are acceptable if you desire to open more
than one account. Special applications are needed for certain retirement
accounts such as Traditional IRAs and Roth IRAs. These forms may be obtained
through Shareholder Services.
Mail the application with your check made payable to "STAAR Investment
Trust" to the Shareholder Services address listed on the inside back cover of
this prospectus. Do not forget to indicate on the Application the amounts or
percentage of your check to be put in each Fund.
<PAGE> 29
Page 26
Through Your Registered Investment Representative
Your representative can help you with forms and the processing of your
check.
By Wire
Call Shareholder Services for availability and instructions.
By Payroll Deduction
You may be able to purchase shares through an Employer-Sponsored Plan.
NOTE: You are responsible for any losses or fees incurred by the trust or its
Advisor or Transfer Agent or Custodian if an order is canceled because a check
does not clear, and such costs may be deducted from your account.
MINIMUM INITIAL INVESTMENT
Regular Accounts: $10,000 to the entire Trust, which may be split among the
Funds subject to a $1,000 minimum per Fund. The $10,000 minimum may be satisfied
by multiple accounts held by the same investor or members of his or her
immediate family who reside with him or her.
IRA Accounts: $1,000 to the entire Trust, which may be split among the Funds
subject to a $250 minimum per Fund.
The Trust reserves the right to waive or reduce the minimum initial and
additional investments for certain investors, including employer-sponsored
retirement plans.
ADDING TO YOUR INVESTMENTS
By Mail
You may add to your investment at any time by mailing a check payable to
"STAAR Investment Trust" to Shareholder Services. You may use the convenient
tear-off form on your statements or provide written instructions including the
account number. Be sure to specify the amounts that should credited to each
Fund. If no instructions are received, allocation of your check will be made
according to the most recent allocation instructions received.
Minimum Amounts: Additional investments to regular accounts must be no less
than $100 per Fund. If the total amount of the check is insufficient to meet the
per Fund minimum, the deposit will be made in order of the largest Fund
allocation according to the most recent allocation instructions received.
By Automatic Investment Plan
You may establish an Automatic Investment Plan by filling out the
appropriate form, which you may obtain from Shareholder Services. An Automatic
Investment Plan authorizes direct monthly deposits from your bank account.
Minimum Amounts: Additional investments to regular accounts must be no less
than $50 per Fund. If the total amount of the check is insufficient to meet the
per Fund minimum, the deposit will be made in order of the largest Fund
allocation according to the most recent allocation instructions received.
EXCHANGING SHARES
You may exchange shares of one Fund for another either by phone or by
signed instructions mailed or faxed to Shareholder Services.
SELLING SHARES
You can sell your shares on any day the Trust is open for business.
Generally, you can sell up to $10,000 total from any Fund or combination of
Funds over the phone or by a signed letter delivered to Shareholder Services. Be
sure to include the signatures of all registered owners as on the original
application or any subsequent change of authorized signatures. However, to
protect you and the Trust, we may require written instructions with a signature
guarantee for each owner if:
- You are selling more than $10,000 worth of shares.
- You want to have proceeds paid to someone who is not a registered owner.
- You want to have the proceeds sent to an address other than the address
of record or a pre-authorized account.
- You have changed the address on your account by phone within the last 15
days.
<PAGE> 30
Page 26
You may also redeem your shares through a broker-dealer if your shares are
held through a broker-dealer account. In this case you must call your
broker-dealer who will then execute your trade instructions. A broker-dealer may
impose a separate fee for such transactions.
Your redemption will be calculated at the share price equal to the Net
Asset Value at the end of the day your request is received if it is received by
Shareholder Services by 3:30 P.M. (Eastern Time). If the request is received
after 3:30 P.M. or on a day the Trust is not open for business, it will be
processed as of the close of the next business day.
Your redemption check will generally mailed to you via first-class mail
within seven days after we receive your request in proper form. We will use
Priority Mail or Overnight Mail if requested, but your account will be charged
for this service.
If you want to sell shares recently purchased by check or bank draft,
your distribution may be held until your check or draft has cleared, which could
take up to fifteen days from the purchase date.
INVESTOR SERVICES
DISTRIBUTION OPTIONS
You may choose one of the following options when you open your account. You
may change your option at any time by notifying us in writing.
-- Dividends and capital gains distributions are reinvested in additional
shares. (This option will be assigned if no other option is selected.)
-- Dividends and short-term gains in cash and long-term capital gains
reinvested in additional shares.
-- Dividends and capital gain distributions in cash.
Automatic Exchanges
You may request automatic monthly exchanges from one Fund to another. The
minimum is $100 per Fund.
Systematic Withdrawal Plan
You may request automatic monthly withdrawals from a Fund. The minimum
withdrawal amount is $100 per month per Fund.
TAX CONSEQUENCES
For federal income tax purposes, distributions of investment income
(including dividends and short-term gains) are taxable as ordinary income.
Long-term capital gain distributions are eligible for reduced income tax rates.
Investments in foreign securities may be subject to foreign withholding taxes.
Distributions are taxable even if reinvested unless the account is a qualified
retirement plan. You should consult your tax advisor regarding the effect of any
investment on your taxes.
An exchange of a Fund's shares for shares of another Fund will be treated
as a sale of the Fund's shares and any gain on the transaction may be subject to
federal income tax.
Statements and Reports
You will receive activity confirmations and statements that show your
account transactions. You will also receive the Trust's Annual and Semi-annual
Reports. Duplicate statements to an advisor may be requested.
POLICIES
Fees for Special Services
The Trust may charge a reasonable fee to your account for certain special
services, such as wire redemption, special mailing requests and producing
historical records.
DISTRIBUTION ARRANGEMENTS
The Trust Funds have adopted a plan under rule 12b-1 that allows the Funds
to pay distribution fees for the sale and distribution of their shares. Because
these fees are paid out of the Funds' assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges.
<PAGE> 31
Page 29
Time Limits For Crediting Purchases, Exchanges And Redemptions
Orders received in proper order before the close of the New
York Stock Exchange (generally 4:00 PM, Eastern Time) will be credited at the
closing share price on that day. Otherwise, the transaction will be processed at
the closing share price on the next trading day.
Accounts With Low Balances
The Trust reserves the right to close accounts with balances low enough to
cause extra expense, which would be detrimental to other shareholders.
Generally, this applies to any Fund account with a balance less than $500 in any
one Fund. If the Trust elects to exercise this right, and if your account falls
into this category, a letter will be mailed to you giving you the option of
adding to your account, exchanging shares of the Fund for shares in another Fund
to meet the minimum, or closing it within 30 days.
<PAGE> 32
Page 28
Changes in Investment Minimums
At any time, the Trust may change its investment minimums or waive minimums
for certain types of purchases.
Joint Accounts
Where two individuals are registered as owners, the Trust will designate
the ownership as "joint tenants with rights of survivorship" unless specified
otherwise. All registered owners must agree in writing to any ownership changes.
Right to Reject Orders
The Trust reserves the right to reject purchase, exchange or redemption
orders which it considers not properly requested or where there is some doubt as
to whether the proper owner has made the request or where the order involves
actual or potential harm to the Trust. Potential harm could be caused by
excessive orders during periods of market volatility or by large redemption or
exchange orders which adversely affect the Fund's ability to manage its assets.
The Trust may also impose limitations on the size and frequency of exchanges to
protect Shareholders from potential adverse effects of market timing.
BROKERAGE ALLOCATION
The Trustees and/or Manager may select brokers who execute purchases and
sales of each Fund's securities and provide other brokerage and research
services. The Funds are authorized to pay commissions to such brokers in excess
of that which might be obtained with other brokers in recognition of services
provided. Where a Fund owns other mutual funds, and such funds pay 12b-1 fees,
these fees may be paid to brokers as part of their compensation. In 1999
approximately 100% of such commissions were received by Olde Economie Financial
Consultants, Ltd. The Trustees may authorize use of a broker-dealer that may
have a relationship with officers or employees of the Advisor, whereby
commissions and 12b-1 compensation can be paid to such officers or employees.
Such an arrangement existed during the past fiscal year with Andre Weisbrod.
<PAGE> 33
Back cover
Where to Learn More
Mailing Address: STAAR Investment Trust, 604 McKnight Park Dr., Pittsburgh, PA
15237.
Shareholder Services: STAAR Financial Advisors, Inc. 800/332-7738 PIN 3371
E-mail Address: [email protected]
Web Site: www.staarinvest.com
Statement of Additional Information (SAI)
You may request the SAI, which contains more detailed information on all
aspects of the Trust. A current SAI has been filed with the Securities and
Exchange Commission (SEC) and is incorporated by reference into this prospectus.
Annual and Semi-Annual Reports
Additional information about the Funds' investments is available in the
Trust's annual and semi-annual Reports to shareholders. In the Trust's annual or
semi-annual report you will find a discussion of the market conditions and
investment strategies that significantly affected the Funds' performances during
their last fiscal year or semi-annual period.
The SAI, reports and other information about the Funds can be obtained at no
charge from Shareholder Services. Call 1-800-332-9076, PIN 3370, or write to the
address above. The information requested will be mailed to you within 3 business
days from the time the request is received by Shareholder Services.
The SAI, reports and other information about the Funds can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room in
Washington, DC. They may also be obtained or by calling the Commission's Public
Reference Room (1-202-942-8090) or on the Commission's Internet Web Site at
www.sec.gov. Copies of this information may also be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the Commission,
Washington, DC 20549-6009.
Investment Company Act File Number 811-09152
<PAGE> 34
Item 10 - COVER PAGE AND TABLE OF CONTENTS
PART B
STATEMENT OF ADDITIONAL INFORMATION
THE STAAR INVESTMENT TRUST
Intermediate Bond Fund (IBF)
Long-Term Bond Fund (LTBF)
Larger Company Stock Fund (LCSF)
Smaller Company Stock Fund (SCSF
International Fund (INTF)
AltCat Fund (ACF)
604 McKnight Park Drive
Pittsburgh, PA 15237
(412) 367-9076
This Statement of Information is not a prospectus. It relates to the
Prospectus of the Staar Investment Trust (the "Trust") dated
May 1, 2000,
as supplemented from time to time.
This Statement of Additional Information should be read in conjunction with
the Prospectus. The Trust's Prospectus can be obtained by writing to the Trust
at the above address or by telephoning the Trust at 1-800-33ASSET, P.I.N. 3370.
The prospectus and annual/semi-annual reports may be incorporated into this SAI
by reference.
Date: May 1, 2000
<PAGE> 35
Page 1
THE STAAR INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
<TABLE>
<S> <C>
PART B:
General Information And History 2
Description of the Funds and
Their Investments and Risks 2
Management of the Funds 3
Control Persons and Principal Holders
of Securities 3
Investment Advisory and Other Services 3
Brokerage Allocation and Other Practices 4
Purchase, Redemption and Pricing of
Securities Being Offered 4
Tax Status 4
Calculation of Performance Data 5
Other Information 5
Financial Statements 6
PART C
Other Information 21
</TABLE>
<PAGE> 36
Page 2
Item 12 - HISTORY
The Registrant, STAAR Investment Trust (the Trust), is an open-end,
management investment company including six series Funds. It was formed on
February 28, 1996 as a private Pennsylvania business trust for the purposes of
commencing business as an investment company under the name STAAR System Trust.
It had engaged in no prior business activities. Its public registration became
effective on May 28, 1997. The name was changed to STAAR Investment Trust on
April 3, 1998. There has been no material change in operations since the
beginning of investment operations on April 4, 1996.
Item 12 - DESCRIPTION OF THE FUNDS, THEIR INVESTMENTS AND RISKS
As described in the prospectus, the Trust consists of six
series Funds, each of which has its own objectives, policies and
strategies designed to meet different investor goals. The information
below is provided as additional information to that already provided in
the prospectus.
The Funds are:
Intermediate Bond Fund (IBF)
Long-Term Bond Fund (LTBF)
Larger Company Stock Fund (LCSF)
Smaller Company Stock Fund (SCSF
International Fund (INTF)
AltCat Fund (ACF)
Each Fund has adopted certain fundamental investment policies.
These fundamental investment policies cannot be changed unless the
change is approved by (a) 66 2/3% or more of the voting securities
present in person or by proxy at a meeting (if the holders of 50% or
more of the outstanding securities are present in person or by proxy)
or (b) more than 50% of the outstanding voting securities of the Fund,
whichever is lesser. The fundamental policies provide, in addition to
those listed in the prospectus, as follows:
(1) No Fund of the Trust issues different classes of
securities or securities having preferences of seniority over other
classes.
(2) The Trust will not engage in Short Sales (borrowing stock
from someone else and selling it in anticipation of the price going
down, at which time it is repurchased and returned to the lender).
However it is possible that managers of other open or closed end funds
owned by a Trust Fund may employ short sales.
(3) The Trust will not purchase securities with borrowed money
(or margin). The Trustees will attempt to avoid purchasing shares of
any other mutual funds which utilize margin purchases other than in
amounts less than five (5%) percent of its portfolio. In general, the
policy of the registrant is to avoid debt. It will not borrow money,
except where it would become necessary to allow the Trust to maintain
or improve its day-to-day operations in the interest of Fund
shareholders. For that purpose, the Trust may obtain a line of credit
or obtain specific financing from a bank, other financial institution
or individual(s).
(4) The Trust will not act as an underwriter of other issuers,
except to the extent that in selling portfolio securities, it may be
deemed to be a statutory underwriter for the purposes of the Securities
Act of 1933.
(5) Except for investments in the mutual fund or Investment Company
industry, the Funds will not make investments that will result in a
concentration (as that term is defined in the 1940 act or any rule or order
under that Act) of its investment securities of issuers primarily in the same
industry; provided that this restriction does not limit the investment of the
fund assets in obligations issued or guaranteed by the U.S. Government, its
agencies or in tax-exempt securities or certificates of deposit.
(6)The purchase of real estate is permitted in the AltCat
(ACF) Fund. The majority of any real estate holdings, if any, will be
in Real Estate Investment Trust (REITs) and / or real estate-oriented
mutual funds, thereby preserving a high degree of liquidity that is not
possible with other forms of real estate ownership. However, if a
special situation arises which the Trustee considers to be advantageous
to the Fund, a real estate asset with limited liquidity may be owned as
long as it does not exceed five percent (5%) of the total value of the
Fund at the time of purchase. If other assets decline in value so as to
force such an asset to exceed five percent (5%), the Trustees will
attempt to sell the asset if a favorable price can be obtained.
However, if it is not in the best interest of the shareholders the
Trustee may delay such sale until a more favorable time.
The purchase of real estate mortgage loans is permitted in the
Bond Funds (IBF and LTBF) and the AltCat Fund (AFC). Such mortgages
will generally be in government agency backed loans such as GNMA
("Ginnie Mae") loans. However, a minority of mortgage securities owned
by a Fund may be in non-government agency backed loans.
(7) Commodities and Precious Metals or securities and
contracts deriving their value from Commodities and Precious Metals may
be purchased only in the AltCat Fund and not in the other Funds.
(8) Trust Funds may not loan cash or portfolio securities to
any person. However, this does not prevent managers of other mutual
funds owned by a fund from making such loans within their portfolios.
(9) The Trust and any managers it employs may use Derivatives,
which are financial instruments which derive their values from the
performance of another security, assets or index. Derivatives include
options and future contracts.
<PAGE> 37
Page 3
The writing of Put and Call options are permitted by the Trust
and any managers it may employ. However, the use of such options is to
represent a minority of any managers activity, and will be employed in
a conservative manner to protect a profit or offset losses in the event
of projected significant price reductions. The Trustees or a manager
employed by them may purchase a Put, which provides the right to sell a
security to another party at a predetermined price within a period of
time. Similarly a Call option may be purchased which provides the right
to purchase a security at a predetermined price within a period of
time. A Call option may also be sold to another party. Such options
will be "covered", meaning the Fund owns an amount of the underlying
security equal to or greater than the amount of the security
represented in the option. Put options will not be sold because, in the
Advisor's opinion, they expose a Fund to additional risk, which The
Trustees wish to avoid. Similarly, options based upon indexes or other
assets, such as commodities, may be purchased to protect a portfolio,
but not sold where a Fund would be required to pay cash to another
party based upon a future price change. Any mutual funds owned by a
Fund will be screened to determine if such mutual funds' policies on
options, futures, margin or other strategies differ greatly from that
of the Trust; however, the Trustees will not be able to control the use
of such strategies by mutual funds. Therefore, at any given time a
Fund's risk could be increased to the extent managers of other mutual
funds employ these kinds of strategies in a manner inconsistent with
the Trust's policies.
(10) The Funds may take temporary investment positions when the
manager(s) believes the market or economy is experiencing excessive volatility
or when such volatility is considered a significant risk. These investments may
include, but are not limited to, cash and cash equivalents, money market
instruments or funds and U.S. Treasury obligations. Under such circumstances the
Fund(s) may be unable to pursue their investment goals.
(11) There are no restrictions regarding portfolio turnover.
While the trust recognizes that a higher portfolio turnover will, in
most cases, increase expenses, there are times when a high turnover may
be justified, either to protect a portfolio against certain kinds of
risks or to take advantage of opportunities presented by market
conditions. In general, the Trust's objective is to keep expenses, and,
therefore, turnover, as low as possible. This objective will be
considered when screening other mutual funds for possible inclusion in
a Fund's portfolio.
The Trust has certain non-fundamental policies which may be
changed by the Trustees. Among these are the following:
1) No Fund may invest in securities for the purpose of
exercising control over or management of an issuer; or
2) purchase securities of a closed-end or other investment
company where the shares are not registered in the United States
pursuant to applicable securities laws.
3) The Fund portfolios shall each not invest more than 10% of
the value of its respective total assets in illiquid securities or
other illiquid assets.
Item 13 - MANAGEMENT OF THE FUNDS
Trustees
The board of trustees is responsible for providing and overseeing
management, operations and shareholder services for the Funds under the
applicable laws of the commonwealth of Pennsylvania. The board generally meets
quarterly to review Fund operations, performance and any appropriate issues and
to take action as needed.
<TABLE>
<CAPTION>
Name Position Held Principal Occupation(s)
& Address With Registrant during Past 5 Years
<S> <C> <C>
J. Andre Weisbrod* President President, STAAR
Financial Advisors, Inc.
(Investment Advisor to
the Trust)
Pittsburgh, PA
Ronald G. Benson* Secretary Business Consultant,
Regional Director,
Fellowship of Companies
for Christ,International
Pittsburgh, PA
Jeffrey A. Dewhirst Trustee Investment Banker
Principal, Corporate
Finance Associates
Sewickley, PA
Thomas J. Smith Trustee President & CEO,
Capmasters, Inc.
(A marketing firm)
Pittsburgh, PA
John H. Weisbrod*1 Trustee Retired President of
Sea Breeze Laboratories
</TABLE>
* These people are interested persons.
1 John H. Weisbrod is the father of J. Andre Weisbrod
Compensation
Each Trustee was compensated at the rate of $225 per quarter in 1999.
Indemnification
The Declaration of Trust and the By-Laws of the Trust provide
for indemnification by the Trust of its Trustees and Officers against
liabilities and expenses incurred in connection with litigation in
which they may be involved as a result of their positions with the
Trust, unless it is finally adjudicated that they engaged in willful
misconduct, gross negligence or reckless disregard of the duties
involved in their offices, or did not act in good faith in the
reasonable belief that their actions were in the best interest of the
Trust and the Funds.
As a group, the board and officers of the Trust owned Fund Shares as
follows:
Fund % Owned
IBF 3.45%
LTBF 13.86%
LCSF 1.89%
SCSF 5.72%
INTF 1.64%
ACF 3.03%
Item 14 - CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES There are no
Control Persons or Principal Holders to report.
Item 15 - INVESTMENT ADVISORY AND OTHER SERVICES
The Advisor to the Trust is STAAR Financial Advisors, Inc.
(SFA), 604 McKnight Park Dr., Pittsburgh, PA 15237. The President and
principal owner of SFA is J. Andre Weisbrod. He is also on the Board of
Trustees of the STAAR Investment Trust. No other stockholder of the
Advisor owns 5% or more of the Advisor.
John H. Weisbrod, member of the Board of Trustees, is a
minority stockholder of the Advisor and father of J. Andre Weisbrod.
Fees to be paid to the Advisor by terms of the Advisory
Agreement (including "management-related service contract" provisions)
are as follows: The Trust will pay the Advisor a fee based on the
average daily assets in each Fund monthly as follows:
<TABLE>
<CAPTION>
Monthly Rate* Annualized* 1999 Amount Paid
<S> <C> <C> <C>
INTF .0750% .90% 15,572
LCSF .0750% .90% 19,284
SCSF .0750% .90% 15,581
LTBF .0600% .72% 5,826
IBF .0525% .63% 9,347
ACF .0750% .90% 4,092
</TABLE>
*These are maximum fees and will be accrued daily and paid at
the closing of the last business day of the month. The Advisor has
agreed to waive fees as needed to keep advisor fees plus any 12(b)-1
fees from exceeding 1% of average net assets through 2000.
<PAGE> 38
Page 4
Under the Advisory Agreement and fees listed above, SFA also provides,
directly or indirectly, and pays for other services. These include transfer
agency, shareholder services, custody services, fund accounting, compliance,
printing, advertising and general overhead.
TRANSFER AND DIVIDEND-PAYING AGENT
STAAR Financial Advisors, Inc. (SFA), 604 McKnight Park Dr.,
Pittsburgh, PA 15237.
CUSTODIAN
Firstar Bank, 425 Walnut St., M/L 6118, P.O. Box 1118, Cincinnati, OH
45201-1118
INDEPENDENT PUBLIC ACCOUNTANT
Carson & Co., 201 Village Commons, Sewickley, PA 15143
Item 16 - BROKERAGE ALLOCATION AND OTHER PRACTICES
Transactions in Fund portfolios will generally be made with
regard to volume and other discounts to keep transaction expenses as
low as possible. The Trust may use brokers with which higher
commissions are paid than could be obtained elsewhere in return for
research and other services. There is no restriction as to the number
of broker-dealers the Trust may use.
It is anticipated that the Trust will use Mr. J. Andre
Weisbrod, President of the Advisor, as a broker for a portion of the
Trust's transactions. It is anticipated that, over time, the fees paid
by the Trust to the Advisor may be less due to Mr. Weisbrod's ability
to receive income from a portion of the Trust's transactions, including
12b-1 fees paid by some mutual funds owned by Trust Funds. Mr. Weisbrod
is currently affiliated as a registered representative with Olde
Economie Financial Consultants, Ltd. 511 State St., Baden, PA 15005.
Prior to 7/1/98 he was affiliated with Hornor Townsend & Kent, 600
Dresher Rd., STE C2C, Horsham, PA 19044.
The criteria for selection of broker-dealers will include
convenience, reasonableness of commissions, availability and selection
of securities (i.e mutual fund selling agreements, bond inventories and
access to exchanges), and value-added services provided (i.e. research
and reports). At least once every two years, commission structures will
be compared with at least two representative firms, including a
full-service brokerage and a discount brokerage not currently used by
the Trust. If the Trustees determine that any broker(s) currently used
are not reasonable with regard to price and service, a change of such
brokers will be made unless more favorable arrangements can be
obtained.
Brokerage Commissions Paid
<TABLE>
<CAPTION>
Broker-Dealer 1997* 1998 1999 % 1999 of Trades
<S> <C> <C> <C> <C>
Hornor Townsend & Kent $1,900 $200 $ 0 0%
Olde Economie Financial
Consultants, Ltd $ 0 $450 $3,200 100%
</TABLE>
NOTE: The commissions do not reflect payments to broker-dealers of 12b-1 fees
and commissions on certain bonds purchased where amounts are not available on
confirmation statements or are built into initial offerings. It is estimated
that between $12,000 and $15,000 of total commissions and 12b-1 fees were paid
to these broker-dealers in 1999.
12b-1 Plan
Effective September 3, 1998 the Trust has adopted a Plan of
Distribution or "12b-1 Plan" under which it may finance activities
primarily intended to sell shares, provided the categories of expenses
are approved in advance by the board of trustees and the expenses paid
under the Plan were incurred within the preceding 12 months and accrued
while the Plan is in effect.
Among the activities to which 12b-1 expenses may be allocated are
advertising, printing and mailing prospectuses to non-shareholders and
compensation to broker-dealers for sales of shares and services to the Trust and
shareholders. 12b-1 expenses may not exceed .25% of a Fund's average net assets
annually. Any 12b-1 fees paid by the Trust, as a percentage of net assets, for
the previous year are listed In the prospectus under "Trust Expenses". Due to
these distribution expenses, long-term shareholders may pay more than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Security Dealers, Inc.
Item 17 - CAPITAL STOCK AND OTHER SECURITIES
There is only one class of shares issued by the trust. Each share has
equal rights regarding voting, distributions and redemptions. Rights cannot be
modified other than by a majority vote of shares outstanding.
Item 18 - PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
Detailed information on Purchase and Redemption of Shares as
well as Pricing is included in the Prospectus. The Trust may suspend
the right
<PAGE> 39
to redeem shares or postpone the date of payment upon redemption for
more than seven (7) days for (a) any period during which the New York
Stock Exchange is closed or trading on the exchange is restricted; (b)
for any period during which an emergency exists which makes it
impossible or impractical for the Funds to dispose of securities owned
by them or the Funds cannot determine the value of their respective net
assets or for such other periods as the Securities and Exchange
Commission may permit.
Item 19 - TAX STATUS
The series Funds within the Trust intend to qualify as
management investment companies for purposes of Subchapter M of the
Internal Revenue Code and expect to be treated as a regulated
investment company for income tax purposes.
Item 20 - UNDERWRITERS
There are no underwriters of the Funds.
Item 21 - CALCULATION OF PERFORMANCE DATA
Each Fund's performance will be calculated on a Total Return
basis, which is the sum of any income paid and any realized or
unrealized gain or loss of principal. From time to time, the Funds may
publish their average total returns for periods of time. The formula
for calculating such returns is as follows:
P(1 + T)n = ERV
where:
P = a hypothetical initial payment of $10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $10,000
payment made at the beginning at the 1, 5 or 10 year periods at the end
of the 1, 5 or 10 year periods (or fractional portions thereof) Other
time periods may be used from time to time.
Dividends and capital gains are assumed to be reinvested.
Total Return Performance Since May 28, 1998 Public Inception
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Payment $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Av. Annualized
Tot Ret 6.0% 7.4% 25.4% 21.4% 20.7% 12.0%
Years: 5/28/97
to 12/31/99 2.59 2.59 2.59 2.59 2.59 2.59
Ending
Value 11,638 12,036 17,978 16,531 16,280 13,405
</TABLE>
<PAGE> 40
Page 5
Where Yield is calculated, the following formula is used:
YIELD = 2 [(a-b + 1)6 - 1]
cd
where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
Yield Calculation 30 Days Ended 12/31/1998
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Divs &
Int Earned 8105 4535 6454 1662 15478 4938
Expenses
Accrued 1302 744 1924 1745 1685 344
Avg. Shrs.
Outstanding 158341 79221 162194 153132 148484 44835
Max
Offering
price end
of Period 9.96 10.09 13.98 13.86 14.08 12.35
30 Day
Yield 5.23% 5.76% 2.41% -0.05% 8.05% 10.17%
NOTE: Since the LCSF, SCSF, INTF and ACF tend to receive most of their
income in December, the 30 day yields may overstate the annualized yields.
</TABLE>
OTHER INFORMATION
The Prospectus and this Statement of Additional Information do not
contain all of the information contained in the Trust's registration Statement.
The Registration Statement and its exhibits may be examined at the offices of
the Securities and Exchange Commission in Washington, D.C.
Statements contained in the Prospectus and this Statement of Additional
Information as to the contents of any agreement or other document referred to
are not necessarily complete and reference is made to the copy of the agreement
or document filed as an exhibit to the Registration Statement for their complete
and unqualified contents.
<PAGE> 41
Page 6
Item 22 - FINANCIAL STATEMENTS
STAAR INVESTMENT TRUST
FINANCIAL STATEMENTS
DECEMBER 31, 1999
CERTIFIED PUBLIC ACCOUNTANTS
CARSON & COMPANY
P.O. BOX 395
201 VILLAGE COMMONS
SEWICKLEY, PA 15143
(412) 741-8588
FAX (412) 741-0833
Independent Auditor's Report
To the Shareholders and Trustees
STAAR Investment Trust
We have audited the statement of assets and liabilities, including the
schedules of investments of STAAR Investment Trust (comprising,
respectively, the Intermediate Bond Fund, Long Term Bond Fund, Larger
Company Stock Fund, Smaller Company Stock Fund, International Fund and
Alternative Categories Fund) as of December 31, 1998, and the related
statements of operations and cash flows for the year then ended, the
statement of changes in net assets for the two years then ended, and the
selected per share data and ratios for the periods indicated. These
financial statements and per share data and ratios are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and per share data and ratios based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and per
share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1998 by correspondence with the
custodians. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and
ratios referred to above present fairly, in all material respects, the
financial position of each of the respective portfolios constituting the
STAAR Investment Trust as of December 31, 1998, the results of their
operations and their cash flows for the year then ended, the changes in
their net assets for the two years then ended, and the selected per share
data and ratios for the periods indicated, in conformity with generally
accepted accounting principles.
Sewickley, PA
February 28, 2000
<PAGE> 42
Page 7
STAAR INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
ASSETS
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Investments in
securities,at value - $1,551,588 $796,249 $2,580,968 $2,305,297 $2,180,7560 $569,881
Cash (Not including
money market funds) 0 0 0 0 0 0
Interest Receivable 24,224 11,841 1,200 445 141 167
Total Assets 1,575,812 808,090 2,582,168 2,305,742 2,180,897 570,048
========= ======= ========= ========= ========= =======
LIABILITIES
Accounts Payable
for Securities 0 0 150,000 25,000 0 0
Accounts Payable -Other
(Advisors, TTEE, 12B-1 Fees) 1,346 769 1,987 1,800 1,738 458
Total Liabilities 1,346 769 151,987 26,800 1,738 458
========= ======= ========= ========= ========= =======
NET ASSETS $1,574,466 $807,321 $2,430,181 $2,278,942 $2,179,159 $569,590
Shares of Beneficial
Interest Outstanding 159,099 80,012 173,834 164,413 154,817 46,119
Net Asset Value Per Share $ 9.96 $ 10.09 $ 13.98 $ 13.86 $ 14.08 $ 12.35
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE> 43
Page 8
1 INTERMEDIATE BOND FUND Portfolio Valuation Date 12/31/1999
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal UnrealG/L % of Val
---------------------- ---------- ------- ------ -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
205,758 Cash & Equiv. 100.00 100.00 51,094 51,094 0 3.3%
Sub-Total Cash & Equiv. 51,094 51,094 0 3.3%
------- ------- - ----
U.S. Treasury Obligations
45,000 US Tr Nt 6.25 8/31/00 98.97 100.19 44,535 45,085 550 2.9%
20,000 US Tr Nt 6.375 8/15/02 100.45 100.19 20,089 20,038 (51) 1.3%
20,000 US Tr Nt 6.5 5/15/05 100.19 100.03 20,038 20,006 (31) 1.3%
20,000 US Tr Nt 5.5 2/15/08 100.42 93.63 20,084 18,725 (1,359) 1.2%
90,000 US Tr Nt 5.375 2/15/01 101.35 99.19 91,213 89,269 (1,944) 5.8%
50,000 US Tr Nt 5.5 12/31/00 102.69 99.41 51,344 49,703 (1,641) 3.2%
30,000 US Tr Nt 5.25 5/15/04 97.75 95.75 29,325 28,725 (600) 1.9%
Sub-Total U.S. Treasury 276,627 271,551 (5,076) 17.5%
------- ------- ------ ----
Gov. Agency Obligations
50,000 FHLMC Deb 6.49 12/19/05 100.70 96.19 50,350 48,094 (2,255) 3.1%
60,000 FHLMC Deb 6.25 6/24/08 100.00 91.44 60,000 54,863 (5,137) 3.5%
30,000 FHLMC Deb 6.125 7/24/08 93.75 91.81 28,125 27,544 (581) 1.8%
40,000 FHLMC Deb 5.0 2/15/01 99.16 98.50 39,662 39,400 (262) 2.5%
20,000 Fed Hm Ln Bk 6.17 7/30/02 102.22 98.94 20,443 19,788 (655) 1.3%
40,000 Fed Hm Ln Bk 5.925 8/14/03 100.98 96.56 40,391 38,625 (1,766) 2.5%
60,000 Fed Hm Ln Bk 5.8 11/04/05 96.63 93.69 57,975 56,213 (1,762) 3.6%
40,000 Fed Hm Ln Bk 6.05 2/24/06 95.25 92.72 38,100 37,088 (1,012) 2.4%
50,000 Fed Hm Ln Bk 6.18 5/29/03 98.50 98.53 49,250 49,266 16 3.2%
25,000 Fed Nat Mtg Ass 7.32 5/3/06 100.00 98.64 25,000 24,660 (340) 1.6%
35,000 Fed Nat Mtg Ass 7.37 3/09/07 103.12 96.64 36,092 33,824 (2,268) 2.2%
75,000 Fed Nat Mtg Ass 5.39 11/5/03 99.56 95.26 74,672 71,445 (3,227) 4.6%
25,000 Fed Nat Mtg Ass 6.1 4/24/03 98.00 96.37 24,500 24,093 (408) 1.8%
20,000 Fed Nat Mtg Ass 6.03 2/2/09 92.75 91.48 18,550 18,296 (254) 1.2%
20,000 TVA Pwr 93Ser 6.125 7/15/03 97.00 97.28 19,400 19,456 56 1.3%
13,000 TVA Pwr 95Ser 6.375 6/15/05 97.25 97.07 12,643 12,619 (24) 0.8%
Sub-Total Gov. Agency 595,152 575,272 (19,880) 37.1%
------- ------- ------- ----
Corporate Obligations
50,000 Am Gen Corp 6.25 3/15/03 103.07 97.07 51,537 48,535 (3,002) 3.1%
25,000 Avco Fin Srv 7.375 8/15/01 102.00 100.50 25,500 25,125 (375) 1.6%
30,000 Columb/HCA Hlth 6.87 9/15/03 98.63 92.82 29,588 27,846 (1,742) 1.8%
20,000 IBM NT BkEntNC 7.25 11/01/02 102.14 100.79 20,427 20,158 (269) 1.3%
25,000 M Lynch&Co Nts NC 8.0 2/1/02 103.50 101.79 25,875 25,448 (428) 1.6%
15,000 Morg Stnly Nt 6.375 12/15/03 96.90 97.23 14,535 14,585 50 0.9%
40,000 Disney Co Nts 6.375 3/30/01 102.79 99.51 41,117 39,804 (1,313) 2.6%
20,000 BellSouth Comm 6.5 2/01/00 100.25 100.05 20,050 20,010 (40) 1.3%
80,000 Ford Mtr Cr 6.0 1/14/03 102.84 96.86 82,268 77,488 (4,780) 5.0%
50,000 Lehman Bros 6.625 2/05/06 97.07 94.24 48,534 47,120 (1,414) 3.0%
50,000 Lehman Bros 6.625 4/01/04 98.29 96.57 49,147 48,285 (862) 3.1%
40,000 Mellon Finl Co. 6.0 3/01/04 100.09 95.95 40,036 38,380 (1,656) 2.5%
45,000 M Lynch & Co Nts 5.5 2/12/04 100.00 93.60 45,000 42,120 (2,879) 2.7%
40,000 M Lynch & Co Nts 6.0 2/17/09 92.72 89.78 37,089 35,912 (1,176) 2.3%
50,000 Morg Stnly Nts 5.625 1/20/04 99.72 94.52 49,859 47,260 (2,599) 3.0%
35,000 New Eng Tel Co. 6.125 10/01/06 101.03 92.41 35,359 32,344 (3,015) 2.1%
25,000 St Paul Cos 6.17 1/15/01 99.99 99.28 24,997 24,820 (177) 1.6%
40,000 Sears Acc Corp 6.92 6/17/04 104.80 96.08 41,920 38,432 (3,488) 2.5%
Sub-Total Corporate 682,836 653,671 (29,163) 42.1%
------- ------- ------- ----
Total Account 1,605,711 1,551,588 (54,123) 100.0%
========= ========= ======= =====
</TABLE>
See notes to financial statements
Note: This portfolio valuation does not include accrued income and expense.
Therefore, the total value shown above is not the same as the net asset
value.
<PAGE> 44
Page 9
2 LONG TERM BOND FUND Portfolio Valuation Date 12/31/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal UnrealG/L % of Val
---------------------- ---------- ------- ------ -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
3,017 Cash & Equiv. 1.00 1.00 18,442 18,442 0 2.3%
Sub-Total Cash & Equiv. 18,442 18,442 0 2.3%
------ ------ - ---
U.S. Treasury Obligations
10,000 US Tr Nt 5.625 2/15/06 92.70 95.66 9,270 9,566 296 1.2%
75,000 US Tr Bd 7.25 5/15/16 105.59 104.53 79,194 78,398 (796) 9.8%
25,000 US Tr Bd 7.125 2/15/23 100.88 104.03 25,219 26,008 789 3.3%
15,000 US Tr Bd 6.875 8/15/25 99.99 101.81 14,998 15,272 275 1.9%
20,000 US Tr Bd 7.25 8/15/22 100.81 105.44 20,163 21,088 925 2.6%
15,000 US Tr Bd 6.25 8/15/23 104.86 94.28 15,730 32,998 (2,682) 4.1%
40,000 US Tr Bd 5.50 8/15/28 100.75 85.28 40,300 34,112 (6,188) 4.3%
Sub-Total U.S. Treasury 224,824 217,442 (7,382) 27.3%
------- ------- ------ ----
Gov. Agency Obligations
35,000 FNMA 6.37 2/25/14 89.50 89.83 31,325 31,441 116 3.9%
20,000 FNMA 5.62 2/25/02 98.13 97.73 19,625 19,546 (79) 2.5%
25,000 FHLBB 5.73 9/04/08 92.56 91.53 23,141 22,883 (258) 2.9%
20,000 FHLMC 7.375 10/25/11 99.50 97.13 19,900 19,900 (475) 2.4%
35,000 FHLMC 6.85 5/14/13 100.28 91.31 35,099 35,099 (3,139) 4.0%
30,000 FHLMC 6.42 8/19/13 101.26 89.78 30,379 30,379 (3,444) 3.4%
25,000 FHLMC 6.7 2/15/11 102.94 92.59 25,734 25,734 (2,586) 2.9%
40,000 FFCB 6.9 9/08/15 101.95 97.28 40,780 38,912 (1,868) 4.9%
Sub-Total Gov. Agency 225,983 214,249 (11,734) 26.9%
------- ------- ------- ----
Corporate Obligations
25,000 Arkansas Power & Lt 7.0 9/08/15 103.50 87.24 25,875 21,810 (4,064) 2.7%
15,000 Bankamer Corp MTN 6.5 5/6/13 100.00 85.37 15,000 12,806 (2,194) 1.6%
15,000 Chase Man Corp MTN 6.5 5/6/13 100.25 91.02 15,037 13,653 (1,385) 1.7%
35,000 Citicorp 7.2 9/15/10 102.38 100.19 35,831 35,067 (765) 4.4%
20,000 Disney Mtn Semi 7.75 9/30/11 100.00 100.02 20,000 20,004 4 2.5%
40,000 Ford Mtr Cred MTN 7.0 9/20/10 101.00 93.69 40,400 37,476 (2,924) 4.7%
25,000 GE Cap Corp 6.4 1/16/13 99.75 88.89 24,938 22,223 (2,715) 2.8%
20,000 Gen Mot Corp Nts 7.10 3/15/06 99.31 98.85 19,861 19,770 (91) 2.5%
35,000 Lehman Bros Holdings 7.0 5/12/14 93.99 89.73 32,896 31,406 (1,490) 3.9%
50,000 Merrill Lynch 6.33 2/25/14 99.40 91.44 49,700 45,720 (3,980) 5.7%
15,000 Morgn Stnly Cap Gr 7.45 7/3/12 100.00 94.85 15,000 14,153 (848) 1.8%
15,000 So.Westn Bell Deb 6.75 6/01/08 96.25 95.19 14,438 14,279 (160) 1.8%
30,000 Xerox Cr Corp MTN 6.5 1/28/13 100.00 88.86 30,000 26,658 (3,342) 3.3%
35,000 Xerox Cr Corp MTN 6.5 2/11/13 100.00 88.84 35,000 31,094 (3,906) 3.9%
Sub-Total Corporate 373,976 346,116 (27,858) 43.5%
------- ------- ------- -----
Total Account 843,224 796,249 (46,975) 100.0%
======= ======= ======= =====
</TABLE>
See notes to financial statements
Note: This portfolio valuation does not include accrued income and expense.
Therefore, the total value shown above is not the same as the net asset
value.
<PAGE> 45
Page 10
3 LARGER COMPANY STOCK FUND Portfolio Valuation Date 12/31/99
<TABLE>
<CAPTION>
Shares Quantity Description UnitCost Price Cost MktVal UnrealG/L % of Val
- ------ ---------------------- ---------- ------- ------ -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
364,618 Cash & Equiv. 1.00 1.00 364,618 364,619 0 14.1%
Sub-Total Cash & Equiv. 364,618 364,618 0 14.1%
------- ------- - ---
U.S. Large Co. Stock Fds
10,256 Bear Stearns S&P Stars A 22.41 31.33 229,845 321,308 91,464 12.4%
5,535 Fundamental Investors Fund 25.64 32.59 141,929 180,393 38,463 7.0%
2,163 Janus Twenty Fund 62.46 83.43 135,106 180,461 45,356 7.0%
5,656 Putnam Fund For Growth & Income 19.50 18.75 110,298 106,045 (4,253) 4.1%
16,827 Putnam Investors A Fund 13.50 19.15 227,139 322,240 95,101 12.5%
6,260 Torray Fund 36.95 44.31 231,281 277,374 46,093 10.7%
7,113 Washington Mutual Investors 25.99 29.56 184,854 210,248 25,395 8.1%
Sub-Total Large Co. Stock Fds 1,260,451 1,598,070 337,618 61.9%
--------- --------- ------- ----
U.S. Large Co. Stock Unit Trusts
10,302 Peroni Top 10 Growth Tr 99 Ser 11.08 14.85 114,146 152,985 38,839 5.9%
13,774 Peroni Top 10 Picks 2000 Ser 10.89 10.97 150,000 151,102 1,102 5.9%
Sub-Total Cash & Equiv. 264,146 304,087 39,940 11.8%
--------- --------- ------- ----
U.S. Larger Mid-Cap Stock Fds
2,806 Mairs and Power Growth Fund 80.30 92.91 225,283 260,664 35,382 10.1%
2,612 Longleaf Partners 26.73 20.49 69,827 53,529 (16,298) 2.1%
Sub-Total Larger Mid-Cap Fds 295,109 314,193 19,083 12.2%
------- ------- ------ ----
Total Account 2,184,324 2,580,968 396,644 100%
========= ========= ======= ===
</TABLE>
See notes to financial statements
Note: This portfolio valuation does not include accrued income and expense.
Therefore, the total value shown above is not the same as the net asset
value.
<PAGE> 46
Page 11
4 SMALLER COMPANY STOCK FUND Portfolio Valuation
12/31/99
<TABLE>
<CAPTION>
Shares Quantity Description UnitCost Price Cost MktVal UnrealG/L % of Val
- ------ ---------------------- ---------- ------- ------ -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
47,864 Cash & Equiv. 1.00 1.00 105,034 105,034 0 4.6%
Sub-Total Cash & Equiv. 105,034 105,034 0 4.6%
--------- --------- ------- ----
U.S. Small Co. Stock Funds
16,268 Acorn Fund 16.63 18.53 270,595 301,454 30,859 13.1%
7,783 Frnkln Small Cap Growth Fd I 21.93 44.13 170,654 343,460 172,806 14.9%
10,406 Ivy Emerging Growth Fund A 28.47 47.29 296,267 492,088 195,821 21.3%
25,519 Royce Opportunity Fund 6.94 7.19 246,538 255,380 8,842 11.1%
Sub-Total Small Co. Stock Fds 984,055 1,392,382 408,328 60.4%
--------- --------- ------- ----
U.S. Smaller Mid-Cap Stocks
24,163 Putnam Capital Opportunities Fund 8.38 10.29 202,433 248,639 46,206 10.8%
9,530 T Rowe Price New Horizons Fd 24.16 27.53 230,275 262,352 32,076 11.4%
Sub-Total Smaller Mid-Cap Fds 432,708 510,991 78,282 22.2%
--------- --------- ------- ----
U.S. Microcap Stock Funds
17,413 Frnkln Microcap Value Fund I 18.99 17.05 330,647 296,889 (33,757) 12.9%
Sub-Total U.S Microcap Funds 330,647 296,889 (33,757) 12.9%
--------- --------- ------- ----
Total Account 1,852,445 2,305,297 452,852 100%
========= ========= ======= ====
</TABLE>
See notes to financial statements
Note: This portfolio valuation does not include accrued income and expense.
Therefore, the total value shown above is not the same as the net asset
value.
<PAGE> 47
Page 12
5 INTERNATIONAL FUND Portfolio Valuation Date 12/31/99
<TABLE>
<CAPTION>
Shares Quantity Description UnitCost Price Cost MktVal UnrealG/L % of Val
- ------ ---------------------- ---------- ------- ------ -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
154,990 Cash & Equiv. 1.00 1.00 154,990 154,990 0 7.1%
Sub-Total Cash & Equiv. 154,990 154,990 0 7.1%
--------- --------- ----- ----
International Stock Funds
5,710 Europacific Fund 26.69 42.66 152,392 243,597 91,204 11.2%
6,899 Hotchkis & Wiley Int'l Fund 22.56 26.40 155,661 182,140 26,479 8.4%
6,422 Ivy International Fund 36.57 47.09 234,835 302,417 67,583 13.9%
13,899 Putnam Int'l Growth Fund A 18,50 29.68 257,151 412,518 155,367 18.9%
8,331 T R Price Int'l Stock Fund 13.96 19.03 116,322 158,535 42,213 7.3%
25,826 Templeton Foreign Fund I 10.06 11.22 259,754 289,768 30,013 13.3%
5,796 Warburg Pincus Int'l Eq Fd 20.84 27.75 120,800 160,847 40,047 7.4%
Sub-Total International Fds 1,296,915 1,749,823 452,907 80.2%
--------- --------- ------- ----
Developing Markets Funds
17,677 Templeton Devel. Mkts Tr I 14.32 10.30 250,830 275,944 25,114 12.7%
Sub-Total Cash & Equiv. 250,830 275,944 25,114 12.7%
------- ------- ------- ----
Total Account 1,702,734 2,180,756 478,022 100%
========= ========= ======= ===
</TABLE>
See notes to financial statements
Note: This portfolio valuation does not include accrued income and expense.
Therefore, the total value shown above is not the same as the net asset
value.
<PAGE> 48
Page 13
6 ALTCAT FUND Portfolio Valuation 12/31/99
<TABLE>
<CAPTION>
Quantity Description UnitCost Price Cost MktVal UnrealG/L % of Val.
------------------------ ---------- ------- ------ -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
47,598 Cash & Equiv. 1.00 1.00 47,598 47,598 0 8.4%
Sub-Total Cash & Equiv. 47,598 47,598 0 8.4%
------ ------ - ---
U.S.Mid-Cap Stock Funds
1,113 Muhlenkamp Fund 34.60 41.11 38,495 45,741 7,246 8.0%
Sub-Total U.S. Mid-cap Stock 38,495 45,741 7,246 8.0%
------ ------ ----- ----
Global Small Co. Stock Funds
2,335 Mutual Series Discovery Fd I 18.48 21.00 43,151 49,037 5,886 8.6%
453 Small Cap World Fund I 26.14 39.14 11,852 17,744 5,891 3.1%
Sub-Total Global Small Co. Stock 55,003 66,781 11,778 11.7%
------ ------ ------ ----
Alternative Categories Fds
1,050 Franklin Gold Fund I 11.48 9.64 12,060 10,124 (1,936) 1.8%
3,892 Frnkln Real Estate Sec Fd I 14.46 12.77 56,268 49,704 (6,563) 8.7%
2,967 Frnkln Nat. Resources Fd I 14.52 13.94 43,087 41,354 (1,733) 7.3%
1,013 Invesco Tech Fund II 33.30 80.79 33,736 81,856 48,120 14.4%
8,041 Ivy China Region Fund A 8.13 9.15 65,409 73,577 8,169 12.9%
4,564 Templeton Latin Amer Fund I 10.64 11.42 48,561 52,125 3,564 9.1%
1,659 Vanguard Special Energy Fund 22.71 21.92 37,687 36,374 (1,313) 6.4%
679 Vanguard Special Health Fund 76.63 95.21 52,028 64,647 12,618 11.3%
Sub-Total Alternative Categories 348,836 409,761 60,925 71.9%
------- ------- ------- ----
Total Account 489,932 569,881 79,949 100%
======= ======= ======= ===
</TABLE>
See notes to financial statements
Note: This portfolio valuation does not include accrued income and expense.
Therefore, the total value shown above is not the same as the net asset
value.
<PAGE> 49
STAAR INVESTMENT TRUST
STATEMENT OF OPERATIONS
12 MONTH PERIOD ENDING DECEMBER 31, 1999 (Total, Six Series Funds)
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Investment Income
Mutual fund dividends
(Including Money Market
Funds) $ 2,715 $ 2,266 $ 18,573 $ 4,562 $ 26,887 $ 7,117
Less: Foreign 0 0 0 0 (2,885) (210)
Withholding Taxes
Interest 79,944 46,054 0 0 0 0
Total Income 82,659 48,320 18,573 4,562 24,002 6,907
======== ======== ======== ======== ======== ========
Expenses
Investment advisory fees 9,347 5,827 19,284 15,581 15,572 4,092
Directors fees, filing,
tax 1,227 673 1,928 1,558 1,652 412
Interest 32 32 32 32 32 32
Marketing/Distrib. 12b-1 229 3 52 11 11 34
Other Expenses
Total Expenses 10,835 6,535 21,296 17,182 17,267 4,570
Less: Fees Waived
Net Expenses
======== ======== ======== ======== ======== ========
Net Investment income $ 71,824 $ 41,785 $ (2,723) $(12,620) $ 6,735 $ 2,337
======== ======== ======== ======== ======== ========
Realized and unrealized
appreciation on Investments
Realized long and short
term capital gains $ (67) $ 359 $173,501 $175,090 $ 85,455 $ 10,602
Unrealized appreciation
(depreciation) (70,701) (79,009) 154,541 363,491 512,583 114,877
Net Realized and
Unrealized Appreciation
(Depreciation) (70,768) (78,650) 328,042 538,581 598,038 125,479
Net increase in net
assets resulting from
operations $ 1,056 $(36,865) $325,319 $525,961 $604,773 $127,816
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE> 50
Page 15
STAAR INVESTMENT TRUST STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Intermediate Bond Fund Long-Term Bond Fund Large Co. Stock Fund
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/99 12/31/98 12/31/97 12/31/99 12/31/98 12/31/97 12/31/99 12/31/98 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Increase in net
assets from
operations:
Investment income-
net $ 71,824 $ 44,443 $ 24,816 $ 41,785 $ 28,611 $ 16,027 $ (2,723) $ 3,808 $ 20,711
Net realized gain on
investments $ (67) $ 1,639 $ 416 $ 359 $ 184 $ 0 $ 173,501 $ 96,995 $ 80,391
Unrealized
appreciation
of investments $ (70,701) $ 8,698 $ 6,335 $ (79,009) $ 12,670 $ 14,766 $ 154,541 $ 93,802 $ 113,591
Net increase in net
Assets resulting
from operations $ 1,056 $ 54,780 $ 31,567 $ (36,865) $ 41,465 $ 30,793 $ 325,319 $ 194,605 $ 214,693
Distributions to
shareholders from:
Investment income $ (63,731) $ (39,696) $ (19,525) $ (38,842) $(26,356) $(14,600) $ (6,573) $ (5,139) $ (20,697)
Realized long term
gains $ 0 $ (1,639) $ (416) $ (359) $ (184) $ 0 $ (166,331) $ (95,098) $ (80,391)
Total
distributions $ (63,731 $ (41,335) $ (19,941) $ (39,201) $(26,540) $(14,600) $ (172,904) $ (100,237) $ (101,088)
========== =========== ========= ========== ======== ======== ========== ========== ==========
Capital share
transactions
(Note 3)
Purchases $ 609,981 $ 547,135 $ 485,679 $ 270,956 $245,762 $ 93,954 $ 361,449 $ 571,825 $ 367,927
Redemptions $ (189,433) $ (70,349) $(150,849) $ (24,577) $(27,482) $ (1,000) $ (107,691) $ (190,149) $ (42,803)
Reinvestment
of dividends $ 63,090 $ 40,840 $ 19,941 $ 38,724 $ 26,169 $ 14,600 $ 172,433 $ 99,911 $ 101,088
Net increase in net
assets resulting
from capital share
transactions $ 483,638 $ 517,626 $ 354,771 $ 285,103 $244,449 $107,554 $ 426,191 $ 481,587 $ 426,212
Total increase in
net assets $ 420,963 $ 531,071 $ 366,397 $ 209,037 $259,374 $123,747 $ 578,606 $ 575,955 $ 539,817
========== =========== ========= ========== ======== ======== ========== ========== ==========
Net assets
Beginning of period $1,153,503 $ 622,432 $ 256,035 $ 598,284 $338,910 $215,163 $1,851,575 $1,275,620 $ 735,803
End of period $1,574,468 $ 1,153,503 $ 622,432 $ 807,321 $598,284 $338,910 $2,430,181 $1,851,575 $1,275,620
========== =========== ========= ========== ======== ======== ========== ========== ==========
</TABLE>
STAAR INVESTMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS (Cont.)
<TABLE>
<CAPTION>
Smaller Co. Stock Fund International Fund AltCat Fund
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/99 12/31/98 12/31/97 12/31/99 12/31/98 12/31/97 12/31/99 12/31/98 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Increase in net
assets from
operations:
Investment income-
net $ (12,620) $ (6,715) $ 12,895 $ 6,735 $ 9,549 $ 16,479 $ 2,337 $ 4,594 $ 3,034
Net realized gain
on investments $ 175,090 $ 47,489 $ 19,460 $ 85,455 $ 26,887 $ 41,589 $ 10,602 $ 4,944 $ 0
Unrealized
appreciation
of investments $ 363,491 $ (13,187) $ 102,497 $ 512,583 $ (11,508) $ (50,250) $114,877 $(39,359) $ 1,692
Net increase in net
Assets resulting
from operations $ 525,961 $ 27,587 $ 134,852 $ 604,773 $ 24,928 $ 7,818 $127,816 $(29,821) $ 4,726
Distributions to
shareholders from:
Investment income $ (25,047) $ 0 $ (12,886) $ (17,629) $ (10,747) $ (16,453) $ (4,157) $ (4,797) $ (2,968)
Realized long term
gains $ (137,565) $ (41,988) $ (19,460) $ (74,957) $ (26,887) $ (41,589) $ (8,868) $ (4,944) $ 0
Total
distributions $ (162,612) $ (41,988) $ (32,346) $ (92,586) $ (37,634) $ (58,042) $(13,025) $ (9,741) $ (2,968)
========== ========== ========== ========== ========== ========== ======== ======== ========
Capital share
transactions
(Note 3)
Purchases $ 294,339 $ 522,933 $ 389,837 $ 276,101 $ 588,719 $ 520,694 $ 78,673 $148,419 $186,767
Redemptions $ (152,934) $ (114,493) $ (14,389) $ (309,286) $ (131,183) $ (21,228) $(10,699) $(52,039) $ (8,496)
Reinvestment
of dividends $ 161,321 $ 41,616 $ 32,346 $ 92,307 $ 37,328 $ 58,042 $ 13,023 $ 9,741 $ 2,968
Net increase in net
assets resulting
from capital share
transactions $ 302,726 $ 450,056 $ 407,794 $ 59,122 $ 494,864 $ 557,508 $ 80,997 $106,121 $181,239
Total increase in
net assets $ 666,075 $ 435,655 $ 510,300 $ 571,309 $ 482,158 $ 507,284 $195,788 $ 66,559 $182,997
========== ========== ========== ========== ========== ========== ======== ======== ========
Net assets
Beginning of period $1,612,867 $1,177,212 $ 666,912 $1,607,850 $1,125,692 $ 618,408 $373,802 $307,242 $124,245
End of period $2,278,942 $1,612,867 $1,177,212 $2,179,159 $1,607,850 $1,125,692 $569,590 $373,801 $307,242
========== ========== ========== ========== ========== ========== ======== ======== ========
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE> 51
Page 16
STAAR INVESTMENT TRUST
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
--- ---- ---- ---- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Net increase
in cash from
operations $ 1,056 $ (36,856) $ 325,319 $ 525,961 $ 604,773 $ 127,815
========= ========= =========== ========= ========= =========
Adjustments required
to reconcile to net
cash provided by
operating activities:
Unrealized (appreciation)
depreciation of
investments 70,701 79,009 (154,541) (363,491) (512,583) (114,877)
(Increase) decrease in:
Interest Receivable
(Accum NII) (7,333) (4,350) (641) (408) (47) (56)
Increase (Decrease)in:
Accrued Interest
Taxes Payable
Advisory/TTEE Fees 833 412 481 550 444 144
Accounts Payable (102,148) (15,116) 150,000 25,000 0 0
Net cash provided by
Operating activities $ (36,891) $ 23,090 $ 320,618 $ 187,612 $ 92,587 $ 13,026
========= ========= =========== ========= ========= =========
Cash provided (used) by
investment activities
Investments Purchased $(698,145) $(283,951) $(1,139,362) $(855,046) $(228,465) $ (76,182)
Sales or Redemptions 160,465 30,384 790,849 584,490 291,465 18,953
Net (used) by investment
Activity $(537,680) $(253,567) $ (348,513) $(270,556) $ 63,000 $ (57,229)
========= ========= =========== ========= ========= =========
Cash provided (used) by
financing activities
Shareholder
Contributions $ 609,981 $ 270,956 $ 361,449 $ 294,339 $ 276,101 $ 78,673
Shareholder Redemptions
(including amounts
Re-invested in other
Trust Funds) (189,433) (24,577) (107,691) (152,934) (309,286) (10,699)
Dividends Declared (63,731) (39,201) (172,904) (162,612) (92,586) (13,025)
Dividends reinvested by
shareholders 63,090 38,724 172,433 161,321 92,307 13,023
Net cash provided by
financing activities $ 419,907 $ 245,902 $ 253,287 $ 140,114 $ (33,464) $ 67,972
Increase (Decrease)
in Cash During Period $(154,664) $ 15,425 $ 225,392 $ 57,170 $ 122,123 $ 23,769
Cash Balance -
beginning of period $ 205,758 $ 3,017 $ 139,226 $ 47,864 $ 32,867 $ 23,829
Cash Balance -
end of period $ 51,094 $ 18,442 $ 364,618 $ 105,034 $ 154,990 $ 47,598
========= ========= =========== ========= ========= =========
</TABLE>
NOTE: The accompanying notes are an integral part of these financial
statements.
<PAGE> 52
Page 17
STAAR INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - ORGANIZATION AND PURPOSE
Staar Investment Trust (the Trust) was organized as a Pennsylvania
business trust under applicable statutes of the Commonwealth of
Pennsylvania. It was formed on February 28, 1996.
The Trust is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust consists of six separate series portfolios (funds). The funds
are organized in such a manner that each fund corresponds to a standard
asset allocation category, with the exception of the Alternative
Categories Fund which is a flexibly managed fund that may invest in
assets not included in the other funds. The Funds are:
The STAAR Intermediate Bond Fund The STAAR Long-Term Bond Fund The
STAAR Larger Company Stock Fund The STAAR Smaller Company Stock Fund
The STAAR International Fund The STAAR Alternative Categories Fund
Each fund is managed separately and has its own investment objectives
and strategies in keeping with the asset allocation category for which
it is named. Each fund may invest in other open-end funds (mutual
funds) as well as closed-end funds and individual securities.
Security Valuation - Net Asset value for each portfolio is computed as
of the close of business on each business day. New investments received
during that day purchase shares of beneficial interest based upon the
end-of-day Net Asset Value per share. Included in the end-of-day net
asset valuation for each portfolio is the net asset valuation of all
investee mutual funds as published on their respective web-sites or
elsewhere. When applicable, equity securities traded on a national
securities exchange (or reported on the NASDAQ national market) are
stated at the last reported sales price on the day of valuation; other
securities traded in the over-the-counter market and listed securities
for which no sale was reported on that date are stated at the last
quoted bid price. Short-term notes are stated at amortized cost, which
is equivalent to value. There were no restricted securities owned by
any of the portfolios as of December 31, 1998. Restricted securities
and other securities for which quotations are not readily available
will be valued at fair value as determined by the Trustees.
Federal Income Taxes - The Trust complies with the requirements of the
Internal Revenue Code that are applicable to regulated investment
companies and distributes all its taxable income to its shareholders.
Therefore, no federal or state income tax provision is required.
Distributions to shareholders - Dividends to shareholders are recorded
on the ex-dividend date.
Other - The Trust follows industry practice and records security
transactions on the trade date. Dividend income is recognized on the
ex-dividend date, and interest income is recognized on the accrual
basis. Discounts and premiums on securities purchased, if significant,
are amortized over the life of the respective securities.
Use of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reported period.
Actual results could differ from those estimates.
NOTE 3 - SHAREHOLDER TRANSACTIONS
The declaration of Trust provides for an unlimited number of shares of
beneficial interest, without par value. The declaration of Trust also
established six series of shares which correspond to the six funds
described in Note 2. During the years ended December 31, 1999 and 1998,
99% and 99% of dividends declared were reinvested by the respective
owners of beneficial interest. Transactions in units of beneficial
interest were as follows:
<PAGE> 53
Page 18
<TABLE>
<CAPTION>
STAAR INVESTMENT TRUST SHAREHOLDER TRANSACTIONS
YEAR ENDED 12/31/98
Fund December 31, 1997 Balance Sold Reinvestment Of Dividends Redemption
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Intermediate
Bond Fund 60,903,780 $ 605,200 52,285,763 $547,135 3,931,675 $40,840 (6,765,385) $ (70,349)
Long-Term
Bond Fund 31,339,247 315,763 22,344,678 245,762 2,371,758 26,169 (2,444,505) (27,482)
Larger
Company
Stock Fund 104,889,391 1,131,829 45,157,660 571,825 7,678,694 99,910 (15,215,622) (190,149)
Smaller
Company
Stock Fund 102,876,597 1,075,143 45,382,099 522,933 3,627,779 41,616 (11,000,096) (114,493)
International
Fund 107,213,876 1,145,174 53,790,691 588,719 3,500,487 37,310 (12,770,633) (131,184)
Alternative
Categories
Fund 29,150,856 302,974 14,010,385 148,420 1,000,510 9,741 (5,520,477) (52,039)
Total Amount $4,576,083 $2,624,794 $255,586 $(585,696)
========== ========== ======== =========
</TABLE>
STAAR INVESTMENT TRUST SHAREHOLDER TRANSACTIONS YEAR ENDED 12/31/99
<TABLE>
<CAPTION>
Fund December 31, 1998 Balance Sold Reinvestment Of Dividends Redemption
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Intermediate
Bond Fund 110,355,833 $1,122,826 61,647,206 $609,981 6,258,207 $63,091 (20,162,500) $(189,433)
Long-Term
Bond Fund 53,611,178 560,212 25,023,750 270,956 3,703,448 38,724 (2,326,184) (24,577)
Larger
Company
Stock Fund 142,510,123 1,613,415 26,802,711 361,449 12,344,856 172,432 (7,822,724) (107,690)
Smaller
Company
Stock Fund 140,886,379 1,525,199 25,224,096 294,339 11,637,513 161,322 (13,335,418) (152,934)
International
Fund 151,734,421 1,640,019 23,495,891 276,101 6,557,982 92,308 (26,971,710) (309,286)
Alternative
Categories
Fund 38,641,274 409,096 7,417,676 78,673 1,054,254 13,025 (993,839) (10,698)
Total Amount $6,870,767 $1,891,499 $540,902 $(794,618)
========== ========== ======== =========
</TABLE>
STAAR INVESTMENT TRUST SHAREHOLDER TRANSACTIONS YEAR ENDED 12/31/99
<TABLE>
<CAPTION>
Fund December 31, 1999 Balance
Shares Amount
<S> <C> <C>
Intermediate
Bond Fund 158,098,746 $1,606,465
Long-Term
Bond Fund 80,012,192 845,315
Larger
Company
Stock Fund 173,834,966 2,039,606
Smaller
Company
Stock Fund 164,412,570 1,827,926
International
Fund 154,816,584 1,699,142
Alternative
Categories
Fund 46,119,365 490,096
Total Amount $8,508,550
==========
</TABLE>
<PAGE> 54
Net undistributed investment income (loss) for each fund as of December 31, 1999
was as follows:
IBF $22,124
LTBF $ 8,981
LCSF $(6,069)
SCSF $(1,837)
INTF $ 1,994
ACF $ (455)
NOTE 4 - SUMMARY OF UNREALIZED GAINS AND LOSSES:
Following is a summary of unrealized gains and losses for each portfolio as of
December 31, 1999:
<TABLE>
<CAPTION>
Unrealized
-----------------------
Market
Cost Gain Loss Net Value
---- ---- ---- --- -----
<S> <C> <C> <C> <C> <C>
Intermediate Bond $1,605,711 $ 672 $ (54,795) $ (54,123) $1,551,588
Long Term Bond 843,224 2,405 (49,380) (46,975) 796,249
Larger Company
Stock Fund 2,184,324 417,195 (20,551) 396,644 2,580,968
Smaller Company
Stock Fund 1,852,445 486,609 (33,757) 452,852 2,305,297
International Fund 1,702,734 478,022 0 478,022 2,180,756
AltCat 489,932 91,494 (11,545) 79,949 569,881
---------- ---------- --------- ---------- ----------
TOTAL $8,678,370 $1,476,397 $(170,028) $1,306,369 $9,984,739
========== ========== ========= ========== ==========
</TABLE>
<PAGE> 55
Page 19
NOTE 5 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH
AFFILIATES: Effective
April 1, 1996, the Trust entered into a Master Investment Advisory
Agreement with STAAR Financial Advisors, Inc., a related party
(advisor). This agreement appointed the Advisor to act as investment
advisor to the Trust on behalf of six series portfolios for a one year
period. This agreement has subsequently been extended through April 1,
2000. The advisor furnishes investment management and advisory services
(rate varies for each portfolio in accordance with a fee schedule
ranging from .63% to .90% of average daily net asset value). During the
years ended December 31, 1999 and 1998, the investment advisor waived
fees as follows:
<TABLE>
<CAPTION>
1999 1998
Amount of Amount of
Fund Fees Waived Fees Waived
<S> <C> <C>
Intermediate Bond Fund $0 $1,033
Long Term Bond Fund 0 603
</TABLE>
The president of the investment advisor is the organizer of the Trust. The
agreement provides for an expense reimbursement from the investment advisor
if the Trust's total expense for any series (fund), exclusive of taxes,
interest, costs of portfolio acquisitions and dispositions and extraordinary
expenses, for any fiscal year, exceed the level of expenses which such
series is permitted to bear under the most restrictive expense limitation
imposed on open-end investment companies by any state in which shares of
such series are then qualified. The agreement also stipulates that all
organization expenses of the Trust are paid by the investment advisor as
well as certain marketing, legal and accounting and transfer and custodial
services for the first two years and longer if approved by both parties on
an annual basis.
The STAAR Investment Trust is also charged 0.09% of the average daily net
asset value for each Fund for various Trust expenses; from this the Trustees
are compensated as a group at a rate of $1,125 per calendar quarter.
Certain affiliated persons holding shares in the six portfolios purchased
such shares at Net Asset value on respective dates of purchase. Those
affiliated persons held aggregate investments in the respective portfolios
as of December 31, 1999 as follows:
<TABLE>
<CAPTION>
Name IBF LTBF LCSF SCSF INTF ACF
---- --- ---- ---- ---- ---- ---
<S> <C> <C> <C> <C> <C> <C>
J. Weisbrod
(including
Immediate family
and Retirement
accounts: 3,202.005 1,945.816 4,768.458 5,454.396 4,435.726 2,433.997
Other Trustees
of STAAR Invest-
ment Trust: 5,341.232 10,989.334 2,985.674 11,110.996 2,122.778 1,190.630
Employees of
investment
Advisor, including
Retirement
accounts: 0.000 0.000 38.961 578.382 37.083 36.941
---------- ----------- ---------- ----------- ---------- ----------
Number of Shares: 8,543.237 12,935.150 7,793.093 17,143.774 6,595.587 3,661.568
Value: $ 85,078 $ 130,512 $ 108,946 $ 237,630 $ 92,838 $ 45,221
========== =========== ========== =========== ========== ==========
</TABLE>
Effective September 1, 1998, Staar Investment Trust received SEC approval of
a 12B-1 arrangement which provides commission payments to broker/dealers who
refer investors who become shareholders in Staar Investment Trust. The
commission structure is .5% for bond funds and 1.0% for stock funds for the
first 12 months from date of purchase and .15% for bond funds and .25% for
stock funds thereafter. Commissions are calculated based on fair market
values and are payable monthly in the first 12 months and quarterly
thereafter. Total 12B-1 commission expense for 1999 and 1998 was $340 and
$24, respectively.
Supplementary Information - Selected Per Share Data and Ratios are provided
In detail in the prospectus.
<PAGE> 56
Page 20
EXAMPLE OF PRICE MAKE-UP
Using 12/31/1999 Data
<TABLE>
<CAPTION>
IBF LTBF LCSF SCSF INTF ACF
<S> <C> <C> <C> <C> <C> <C>
Total Assets 1,551,583.96 796,248.97 2,431,349.53 2,280,288.73 2,180,748.07 569,881.58
Total Interest 24,224.01 11,840.83 810.90 445.38 141.15 166.99
Expenses (1,346.48) (768.72) (1,987.05) (1,799.75) (1,738.16) (458.36)
Total Net Assets 1,574,461.49 807,321.08 2,430,173.38 2,278,934.36 2,179,151.06 569,590.21
Shares Outstanding 158,098.746 80,012.192 173,834.966 164,412.570 154,816.584 46,119.365
Net Asset Value 9.96 10.09 13.98 13.86 14.08 12.35
==== ===== ===== ===== ===== =====
</TABLE>
<PAGE> 57
Page 21
PART C
OTHER INFORMATION
Item 23. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
X(a) Declaration of Trust of the Registrant
X(b) By-laws of the Registrant
(c) Not Applicable
X(d) Investment Advisory Agreement between
Registrant and Staar Financial Advisors,
Inc. (the "Advisor")
(e) Not Applicable
(f) Not Applicable
XX(g) Custodian Agreement between Registrant and StarBank.
X (h) Form of Transfer Agency and Shareholder Services
Agreement among Registrant and the Advisor (see (d) above)
X(h) Consent to Use of Name contained in (d) above
99(i) Opinion of Counsel and Consent of Counsel
99(j) Consent of Independent Accountants
(k) Not Applicable
(l) Not Applicable
XXX(m) Rule 12b-1 Plan
XXXX(n) Financial Data Schedule
(o) Not Applicable
X - Filed with Initial N-1A and incorporated herein by reference.
XX - Filed with Pre-effective Amendment # 1 to Form N-1A and
incorporated herein by reference.
XXX - Filed with Proxy Statement in Post Definitive 14A filing
XXXX - Filed with Form NSAR
</TABLE>
Item 24 - PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Registrant is not directly or indirectly controlled by or under
common control with any person other than the Trustees. The Registrant
does not have any subsidiaries.
Item 25 - INDEMNIFICATION
Under the Registrant's Declaration of Trust and By-laws, any past or
present Trustee or Officer of the Registrant is indemnified to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him or her in connect with any action, suit or
proceeding to which he or she may be a party or is otherwise involved
by reason of his or her being or having been a Trustee or Officer of
the Registrant. The Declaration of Trust and By-laws of the Registrant
do not authorize indemnification where it is determined, in the manner
specified in the Declaration of Trust and the By-laws of the
Registrant, that such Trustee or Officer has not acted in good faith in
the reasonable belief that his or her actions were in the best interest
of the Registrant. Moreover, the Declaration of Trust and By-laws of
the Registrant do not authorize indemnification where such Trustee or
Officer is liable to the Registrant or its shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of his duties.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Trustees, Officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a Trustee, Officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such Trustee, Officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the questions whether
such indemnification is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The Registrant, its Trustees and Officers, its investment adviser, and
persons affiliated with them are insured under a policy of insurance
maintained by the Registrant and its investment adviser, within the
limits and subject to the limitations of the policy, against certain
expenses in connection with the defense of actions, suits and
proceedings, and certain liabilities that might be imposed as a result
of such actions, suits and proceedings, to which they are parties by
reason of being or having been such Trustees or Officers. The policy
expressly excludes coverage for any Trustee or Officer whose personal
dishonesty, fraudulent breach of trust, lack of good faith, or
intention to deceive or defraud has been adjudicated or may be
established or who willfully fails to act prudently.
<PAGE> 58
Page 22
Item 26 - BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Staar Financial Advisors, Inc. (the "Adviser"), is a registered
investment adviser providing investment advice to individuals, employee
benefit plans, charitable and other nonprofit organizations, and
corporations and other business entities.
Set forth below is a list of the Officers and Directors of the Adviser
together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years.
<TABLE>
<CAPTION>
Name/Business Position with Advisor Other
<S> <C> <C>
J. Andre Weisbrod President, Director Registered Representative
Olde Economie Financial
Consultants, Ltd
Charles Sweeney Secretary & Director Marketing Consultant Graphic
Arts Technology Council;
Before 1992 Graphic Arts Sales
Eastman Kodak Company
James A. Gordon Director Retired
</TABLE>
Item 27 - PRINCIPAL UNDERWRITER
Inapplicable.
Item 28 - LOCATION OF ACCOUNTS AND RECORDS
The Registrant maintains the records required by Section 31(a) of the
Investment Company Act of 1940, as amended and Rules 31a-1 to 31a-3
inclusive thereunder at its Pittsburgh office located at 604 McKnight
Park Drive, Pittsburgh, PA, 15237. Certain records, including the
physical possession of its securities, may be maintained pursuant to
Rule 31a-3 at the main office of the Registrant's custodian located as
to the custodian, at FirstStar Bank, 425 Walnut St., M/L 6118, P.O. Box
1118, Cincinnati, OH, 45201-1118, and, as to the transfer and dividend
disbursing agent functions, c/o of the Advisor at 604 McKnight Park
Drive, Pittsburgh, PA, 15237.
Item 29 - MANAGEMENT SERVICES
Inapplicable
Item 30 - UNDERTAKINGS
Inapplicable
NOTICE
"The Intermediate Bond Fund (IBF)," "The Long-Term Bond Fund (LTBF),"
The Larger Company Stock Fund (LCSF)," "The Smaller Company Stock Fund
(SCSF)," "The International Fund (INTF)," and "The Alternative
Categories Fund (AltCat)" are the designations of the Trustees under
the Declaration of Trust of the Trust dated February 28, 1996 as
amended from time to time. The Declaration of Trust has been filed with
the Secretary of State of the Commonwealth of Pennsylvania. The
obligations of the Registrant are not personally binding upon, nor
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Registrant, but only
the Registrant's property shall be bound.
<PAGE> 59
Page 23
SIGNATURES
Pursuant to the requirements of (the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant (certifies that it meets
all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Pittsburgh,
and the State of Pennsylvania on the 17th day of April, 2000.
The Staar Investment Trust
Registrant
By: /s/ J. Andre Weisbrod
--------------------------
J. Andre Weisbrod, Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the date indicated.
/s/ Ronald G. Benson
------------------------
Ronald G. Benson
Trustee April 17, 2000
(Signature) (date)
/s/ Jeffrey A. Dewhirst
------------------------
Jeffrey A. Dewhirst
Trustee April 17, 2000
(Signature) (date)
/s/ Thomas J. Smith
------------------------
Thomas J. Smith
Trustee April 17, 2000
(Signature) (date)
/s/ John H. Weisbrod
------------------------
John H. Weisbrod
Trustee April 17, 2000
(Signature) (date)
/s/ J. Andre Weisbrod
------------------------
J. Andre Weisbrod
Trustee April 17, 2000
(Signature) (date)
<PAGE> 1
Exhibit 99(i)
Consent & Opinion of Legal Counsel
The Undersigned consents to the use of his name and the references in the
Post Effective Amendment to the Registration Statement on Form N-1A of the STAAR
INVESTMENT TRUST, of his opinion dated April 17, 2000.
Pittsburgh, PA. /s/ Alan Z. Lefkowitz
-------------------------------
Date: April 17, 2000 Alan Z. Lefkowitz
ALAN Z. LEFKOWITZ
Counselor-at-Law
2488 Mt. Royal Road
Pittsburgh, PA 15217
Phone (412) 521 0761 Fax (412) 521 8704
April 17, 2000
The Securities and Exchange Commission
Washington DC 20549
Re: The Staar Investment Trust, (Posteffective Amendment to the
Registration Statement on Form N-1A under the Securities
Act of 1933 and the Investment Company Act of 1940
Gentlemen:
I have acted as counsel for the Staar Investment Trust (the"Trust"), a
Pennsylvania business trust, in connection with the Posteffective Amendment to
the Registration Statement filed by the Trust on Form N-1A covering an
indefinite number of units of beneficial interests in the Trust designated as
Funds established by the Trust. I have examined the Declaration of Trust, the
By-Laws and the Actions of Trustees in connection with the establishment of the
Funds. Based on such examination, I am of the opinion that:
(1) The beneficial interests of the Trust have been duly authorized and
the respective Funds of the Trust are duly established and authorized; and, when
issued will be validly issued beneficial interests in the Trust and of the
respective Funds in which such interests are invested.
(2) When sold and issued, the said beneficial interests of the Trust
will be validly issued, fully paid and non-assessable interests in the Trust in
accordance with their respective Fund designations.
Yours Very Truly,
/s/ Alan Z. Lefkowitz
---------------------
Alan Z. Lefkowitz
<PAGE> 1
Exhibit 99(j)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form N 1-A of the Staar Investment Trust of our report dated February 28, 2000
on the Statement of Assets and Liabilities including the schedules of
investments as of December 31, 1999, Statements of Operations and Cash Flow for
the year then ended and the Statements of Changes in Net Assets and the selected
per share data and ratios for the periods indicated.
/s/ Carson & Co.
----------------------------
Carson & Co.
Certified Public Accountants
Sewickley, PA
April 17, 2000
